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The context:
cash secured account low six fig, 90% are short options both sides, few cc positions.
Each position just one lot. Number of positions fluctuates 1-2 dozen. Vanilla premium selling, no strategies, analysis. Not using any spreads, poor mans cc, indexes, stops, LEAPS. No discretionary strikes selections, PnLs thresholds or timing to close.
Returns on risk adjusted basis are nice and steady.
(Let me know if I can clarify anything else for context)
This is what I imagined compared to how it's working in reality. These observations from running portfolio for \~4 last months.
1. I imagined it will be some *steady paced position placement and then taking off winners*
Reality: it's wait, wait and wait more patiently. Then volatility gets flushed, and suddenly a bunch winners show up in PnL table.
2. I imagined position will have some *PnL relation to the market moves*.
Nope, on large up days portfolio daily PnL may be all red due to vol expansion, on non eventful days may have all but one positions green.
3. I imagined *positions will have steady burning theta* and becoming greener when moving towards DTE threshold. Not even close. Almost all time portfolio has negative opened PnL "balance" - that freaked me out first. And most of gains come with vol collapse, like after earnings events, or some funds stopped chasing names.
4. I imagined *balancing portfolio delta* will be a thing but it doesn't seem have much importance. Delta moves around pretty substantially. All portfolio balancing comes from random picks of liquid names so one sided moves don't happen, at least not often.
5. I imagined *opening and closing is a non event*. Pun in order, click send.
In reality, I have 2-5 trade ideas generated and sometime put them to work after days, and sometimes they take 1-2 days to fill at limit price (most do get filled within minutes or hours). Closing is even more challenging! Routinely take days to close winners at the threshold.
6. I also imagined *selling premium is not complicated* at it core.
But in reality it requires thinking about capital allocation and usage level, new positions fit, value ranks. Like chess.
7 I thought there were *plenty of names to sell premium*.
Discovered there are not so many truly liquid names, with good IV and positioning. I recycle some names for selling puts, but it's a challenge to find sellable liquid premium.
8. I thought low six fig is enough to diversify and trade plenty of names.
In reality I realized buying power is the most precious and very scarce. A few clicks and buying power drops to 20% suddenly
Any similar experiences? Are any of this real or just the imagination?
Example of a typical trade in the portfolio.
https://preview.redd.it/nkyp7ws8nznh1.png?width=425&format=png&auto=webp&s=a74ac14e15332d13e5bd590fd63a5790fd2dab57