For the last 6 months I’ve been selling credit spreads on Spx and so far, I’ve been extremely successful. I really like the tax benefits of Spx and also how it’s cash settled. So far, I’ve nearly doubled my accounts value. I’ve learned a lot (from some losses unfortunately) over the last few months but I’m looking for some tips and advice from others to help me refine my strategy.
First, my goal is stable and consistent income and growth. I really do not care for more risk on if I can help it. I’m very picky when choosing my trades.
My strategy is primarily iron condors and if the trend is strong, I’ll wait either for a bounce or pull back to sell into the trend to maximize premium collected and take advantage of IV crush.
I hop between 21 DTE and 30 DTE spread. I only sell 21 DTE if premium is elevated and I suspect the intrinsic value to drop within the next week or so. I never like to hold past 14 DTE. I always take profits at 40-50%. Whenever I’m selling put credit spreads I select 10-12 delta, and when selling call credit spreads I select 8-10 delta.
Again, primarily I trade iron condors and I try my best to time the market and open during a bounce to take advantage of the consolidation.
I only ever risk 20% of my account as my cash collateral (I know this is quite high) and My max loss per trade is set at 100% of the total credit collected. For example, if I collected a 1000$ credit, my spread moves against me fast and I have a loss of 1000$, I close the spread. I learned the hard way that being hopeful for a comeback just results in larger losses over time.
Also, on Spx my wings are always 25-50 points.
I try to avoid holding through major news events or fed data releases, however I do like to open new spreads right after Spx moves from an event like that.
I feel like my strategy may be a bit too conservative , any advice or criticism would be greatly appreciated! Thanks!