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Hello everyone I'd not call myself a pro trader but today I wanted to share my options selling strategy which can be interesting for you. Of course there's no perfect strategy to be profitable every trade and every strategies have their own flaws and advantages.
So hear is my strategy for selling options:
Pick a stock that I really like with strong fundamentals and is beaten down or undervalued
Sell PUT 30-45 days out for expiry. Goal is to make at least 5% gain from Premium
If option expires worthless then Repeat step 1 and 2 until the option gets exercised and I am forced to buy 100 shares
Use the collected premium to buy leaps (long call option) of the same stock for 1-2 year far out for expiry. Book profit for 100%-200% gains
If I am forced to buy 100 shares wait for trend reversal and then start SELL CALL to complete the Wheel strategy
Rinse and Repeat
As you can see with above strategy I plan to make money no matter stocks goes down, up, sideways and in the long run my LEAPS call option will give huge returns in case Stock jumps a lot in a year or two.
If Anytime my option goes in opposite direction, I can roll my options (close my Contract l) to take control of the situation and then repeat the strategy as long as I desire.