My strategies · Invest & Retire Community

My strategies

Hello Friends,

Many people have asked me about my strategies and how I got 199k return in October. A big chunk of those returns were from buying calls during the Oct 10th dip. So I wouldn't advise that as a long term reliable strategy for people. I got outsized returns (100%+) with those trades and I went big as I had conviction in my move. That said I can share some strategies that I do on a regular basis and can recommend

1) QQQ 1DTE Puts: I love selling 1DTE puts on QQQ. This is a core strategy for me. I have backtested this and settled for these parameters. Sell a 5% OTM 1DTE put when market opens (9:35 am). Don't set any profit target or Stop Loss. These will generally expire and you'll collect the full premium. In very rare cases market drops 5% before expiry and you should be happy to take QQQ shares at such a discount. Wait for recovery and capitalize on gains. This strategy has pretty low max drawdown (10%) and gives 14% CAGR (annual returns). I do this on margin so my returns are even more amplified (30-60%). I'm not even counting the capital gains on QQQ (if assigned), just the put premiums.

2) MSTR 25% OTM Puts: Every Friday I sell 25% OTM 7DTE puts on MSTR. This stock has almost never fell 25% in a week yet there are juicy premiums at this strike. I capitalize on these and make consistent money every week. This strategy has pretty low drawdown and great returns. I backtested this.

For both these strategies feel free to hedge and do put spreads instead of puts. I personally do puts for QQQ and put spreads for MSTR (just to ensure there's no margin call issue).

The other main bread and butter strategy I can recommend to everyone will be the wheel strategy. Here is how I recommend doing it. Stock selection is critical for this.

Stock Selection: Pick the top 30 SPY stocks (by market capital). Create a watchlist for these on barchart. We want to pick those stocks that are undervalued (trading in the lower end of their Bollinger Band, RSI near oversold levels etc) and are showing a bounce back. Set up an alert for these stocks or even better join some kind of alert service where they pick these stocks for you and alert you. It's hard to do these technical analysis ourselves. There are so many criteria to get this right (RSI divergence, Moving average divergence, checking no earnings nearby, no bad news about company, no events etc). So better rely on a good alert service. I like OptionSamurai

Entry: Once a stock meets these criteria. Now sell a 30 delta put, at 45 DTE on these stocks and set a 50% profit take order along with your opening order. Set a reminder to check when the option is at 21 DTE.

Trade Management: Now if the profit of 50% is hit, there's nothing to be done. Otherwise at 21 DTE, simply roll the option again to 45 DTE if you are finding a good net credit.

Assignment: If you don't find a good credit there are two choices. If you believe in the stock and want to hold it then go ahead and accept the assignment. If you don't then you can always exit at 21 DTE.

Post Assignment: Once you have the stock assigned, don't immediately sell a Covered Call. Wait for the stock to bounce back to it's upper Bollinger Band. This is where you make real gains. Once the stock is trading at it's upper BB, this is a good time to sell a covered call on it. If you have more cash available, this is a good time to sell both a covered call and another put at the same time. This is called covered strangle and it got great risk vs reward.

(If you don't like stock picking, you can wheel QQQ as well)

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