Short Strangles are completely OP | Theta Gang

Strangles have proven themselves among the most profitable strategies in all but the most extreme market conditions.
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[vincviertytaccount]

I haven't watched the whole video yet, but in general, strategies that win 90% of the time then to wipe you out in the 10% of the cases you lose. This is especially true for strategies that are as agressively short volatility as short strangles are.

[daviddavidson]

You know it's gonna be a good day when you see "Max Loss: Unlimited."

[alphabeta]

2:30 SPY example
11:30 IV
14:30 Best practices
16:30 More premium in 30 delta strangles

[DGFishRfine]

Between you and Benjamin, I've learned a metric fuckton about the market / not being a moron. Thank you!

P.S.: I'd love to see your diabolical trades series revived!

[contone]

“Spy doesn’t move 18% in week”
The Fed would like to have word with you.

[ToninhoTijolada]

It's a nice strategy, but the active manage on naked OTM can be insane to deal with. I would use a short stranddle with a long OTM call since i rather be exerced on put during a falling market than on a call during a rally.

[chrisbuchheit]

Good video Mikey! Glad you finally made the move and started working short strangles.

[nicholasbento]

my problem is that I never feel comfortable writing the call naked, I've done naked strangles but I just feel better about either doing it covered (naked put and covered call) or doing a jade lizard instead

[jsprowse]

Great video on setting up and managing strangles. I'm confused about one thing--selling a 15 delta strangle on $SPY today offers about $540 with a margin requirement of $10K. So I have a maximum 5.4% return on capital, while taking 15% risk. How is this better than selling a vertical spread where you can better match the return against the risk, like ensuring you're collecting at least 25% of the margin requirement on a spread that has a 25 delta?

[michaelf]

This is what I do, too, Mikey, you explain it really well. My main difference is that I also hold some long shares, as well. And do single companies, not ETFs.

[MarkCoxInvesting]

Great video! Best way I’ve seen it explained. Been doing this for years now and sending this to all my new traders and friends

[michaelgavin]

I'm just getting into options and trying to get more exposure. I've been sticking with smaller trades buying single calls/puts after i've attempted to establish a direction and better understanding of timing, delta, and IV change, but the profit seems to be so one dimensional in comparison. I see the massive potential and satsfaction of maneuvering a strangle or other advanced option strategy correctly, and your videos have been amazing at showcasing the process. Were the selling of calls and puts covered? If not what were the margin requirements?
Thanks again for the great explanations.

[thelegodude]

Thank God I was about to start making money, thanks for the upload!

[Tell_It_Right]

Many brokerages wont let you do this because you technically have an UNLIMITED loss potential on the upside, and you need to have enough to cover a possible total loss of stock value on the downside.

[FidgetSpinoza]

Wow fantastic explanation. The 1st down metaphor is very illustrative

[jonlee]

Great video. You can also reduce your risk of the stock mooning by owning 100 shares

[Zumama]

Thanks Mikey. Tendies sounds interesting, however, if no ads and free, how do they make money?

[Chootempaw]

Short strangles aren't just a neutral strategy. They can also be used for bullishness. Covered strangles at least. I'll do it when an underlying is beaten down to lows already. Something I already want to own, starting with wheel strategy selling a cs put. If assigned, open a covered call at same strike as the put was. Then open up a new CS put at a lower strike. This way I profit on both sold options if the underlying goes up but not over the cc, still profit a bit if goes above cc strike, and I acquire more shares of underlying if all goes to hell and underlying goes below CS put. In the last case, I'll now open TWO Covered calls on the 200 shares, And 2 more csp's. You really have to be bullish on the underlying on this to avoid catching a falling knife. Broad ETFs like spy are a safer play, but I'm a high IV gambler so I do this on nat gas BOIL, but keep the delta under 30 on both sides

[TheFunDimension]

Everything is fun and games until you find the retanrd who always exercise their contracts at 40 days from expiration. Or even 30 days if you have (good fortune)

[_tizzle]

This might come across as a bit troll-like accidentally - but thats not my intention. I was one of the early members of the theta gang community, I left because the community members were more into the gamble of options than making calculated +EV decisions that generated long term profits. At the time Mikey was a bit too influenced by WSB, the content he was putting out was lacking of mature guidance in the early days. This video shows how far Mickey and TG has come, well done sir! I primarily sell theta in high IVR environments, and have digested excessive content that provides guidance on this highly flexible strategy - however it’s rare to see a complete discussion that includes order entry and trade management at every step of the decision tree, as Mikey did. His explaination may be the best Ive encountered so far, using a football analogy of downs, making it extremely ez to digest. I will be sharing this video with my friends before sending them to more advanced content (Julia and Anton’s new book “Unlucky Investors Guide to Options Trading” is the end boss of options content, but its not and ez dive without prior fundamentals), Mikey does such a good job of relaying the prior research of Tom’s team in a 20 min digestible format. Well done Mikey!