Options Trading-How to turn every Friday into Payday using Weekly Options by TR Lawrence

B

Brooks

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4.5 stars on Amazon/234 reviews
Basically doing calendar spreads, long put 120 days out, selling weekly puts against it.
Worthwhile, especially $13 for the new paperback.
 
Cool! (and thanks!)

1.how do the weekly short put strikes change?
2.do you retain the long puts week over week until expiration, or?
 
Hi Norm. You're welcome. I haven't started trading it yet. Attached is a file that the author freely gives out with an example of his trading on MRVL. Yes, he may make minor changes to the short strikes if price moves in order to get the premium he wants. He doesn't have a hard rule I saw on the long put but it looks like he gets out with 30-60 days to go. I think he will roll to the next 120 day put out there if the stock is still suitable. With the MRVL example, he admits he stayed in too long after the market got volatile.
 

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SUPER interesting, thanks! I got all energized about this idea and backtested MSFT very robotically for the entire second half of 2023:

(1) Sell 10 ATM puts on Friday mornings at 10am for the following Friday expirations
(2) at the same time, Buy 10 puts for an expiration as close to 120 days out as possible, closest to the same strike prices as available
(3) Close both positions on the short put's expiration date (i.e. the following Friday) at 3pm.

So please do note: there were no profit targets or stop losses which would have improved results here a great deal I image. Even so, here were the impressive results:

1704580118056.png
 

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Norm said:
SUPER interesting, thanks! I got all energized about this idea and backtested MSFT very robotically for the entire second half of 2023:

(1) Sell 10 ATM puts on Friday mornings at 10am for the following Friday expirations
(2) at the same time, Buy 10 puts for an expiration as close to 120 days out as possible, closest to the same strike prices as available
(3) Close both positions on the short put's expiration date (i.e. the following Friday) at 3pm.

So please do note: there were no profit targets or stop losses which would have improved results here a great deal I image. Even so, here were the impressive results:

View attachment 4781
Click to expand...
Nice work, Norm. I think there are 27 trades and 20 winners, 74% winners and an average profit of $917. Nothing wrong with how you did it, but just to clarify, the author would "re-use" the long put and replace it only after ~60 days had passed or if MSFT's price had moved noticeably. Regarding profit targets, he would sometimes close early for a profit once the short option was down to 20% of its original value (i.e. capturing 80% of the profit.
 
Yeah, thanks! I did the backtesting before I saw your helpful reply about MRVL etc. where I saw he doesn't roll the long put as often.

I feel like trying the whole MSFT backtesting again using a retained long put and also closing with some pre-defined profit targets and stop losses.
 
Thanks. I used it many years ago. It's a nice piece of software. I used to write and backtest ETF and stock systems in Tradestation using Easylanguage.
 
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