There’s a lot of talk about how September is one of the worst months historically in the market. Do you take less risk during this month or do you just treat it like any other month?

At a +54 / −40 win-to-loss ratio the break-even win rate is about 43%. Meaning I could be wrong more than half the time and the log would still be green. The 76% isn't the edge. It's a cushion on top of the edge, and it moves around a lot more than people think.

Where the money actually came from

Two buckets. The boring +25–50% trade I take fifteen times a week, and the 59 trades that doubled. Together that's 88% of everything. Strip out just the 59 doublers and the average trade drops from +30.5% to +18%. Still profitable. Not the same business.

Nobody feels the doublers coming. I've gone back and looked. They don't look different at entry from the trades that made +30%. Same setup, same size, same reason. The difference is what the tape did after I was in.

The numbers I'm least proud of

44 of 192 losses were worse than −50%. That's 23% of losers. My stop is supposed to be around −35 to −40. Every one of those 44 is a trade where I sat there and watched.

Longest losing streak: 7. All seven on the same day, June 5th, between −42% and −78% each. I didn't stop trading. I should have stopped after the third.

Longest winning streak: 20. Felt like a genius. It was a good week in a good tape.

The part that changed how I look at it

Win rate barely moved. The median trade drifted down every month. The tape got harder and it showed up in how much the winners paid, not how many there were. If I'd only been tracking win rate I'd have thought nothing changed.

Caveats, because they matter

• These are per-contract percentage moves, not dollar P&L. Sizing wasn't equal across trades, so this is the shape of the outcomes, not a brokerage statement.
• Almost all of it is short-dated long calls in a May–August 2026 tape that was kind to call buyers. A 76% win rate buying calls in a bull run says a lot about the run.
• Long premium caps your losses at −100% and doesn't cap your wins. The fat right tail is a property of the instrument before it's a property of me.

The thing I'd defend: win rate is the number people post because it's the number that looks like skill. The two numbers that actually decide whether you make money are the win/loss ratio and how much of the return lives in a handful of trades you can't identify in advance. Mine is 45% in 7%. I'd be curious what other people's is, if anyone's logged enough to know.

Trades I took today as an option seller (08/31):

Opened Positions

• INOD → $60 Call expiry 09/04 (1 week DTE), premium 0.55 → 55/6000 = ~0.9%. Was assigned INOD at $60 last week. INOD continues to execute well on AI implementation for its clients, and it is a strong wheel stock.
• MOD → $220 Call expiry 11/20 (12 weeks DTE), premium 12.00 → 1200/22000 = ~5.5%. Was assigned MOD at $220. I am selling a longer-dated covered call while collecting a substantial premium. MOD remains an excellent stock in my view, as it provides heat-transfer equipment for data centers.
• FLNC → $21 Call expiry 11/20 (12 weeks DTE), premium 0.55 → 55/2100 = ~2.6%. Was assigned FLNC at $21. The stock has sold-off, but I plan to continue holding it as the premiums are decent and it is also backed by strong investors like Siemens. I am currently selling below my assigned price, but if the stock approaches the $15 range, I will roll the call to my assigned price.

My outlook on the market

As discussed in my last post, I expect a consolidation phase with the market pricing in potential rate hikes. This could be a good time to continue wheeling, as theta decay can become useful in a range-bound market. I will be closely tracking the tickers where I have covered calls opened below my assigned strike price and will roll them as the stocks come close to my strike.

I keep sharing my trades in my account and the Excel file to my full list of positions is linked in my profile description in case anyone wants to see the whole portfolio. Happy to hear thoughts on my positions. What are you guys wheeling or watching right now?

PS: Not financial advice. Do your own research.

Most of my earnings work is finding options that are too expensive. DELL is the cleanest opposite case I've got, and it reports tomorrow after the close.

Options are pricing ±8.9%. DELL's actual move over its last 8 reports: ±11.6% average. Across 19 prints since 2019, options overpriced the move only 37% of the time — vs. ~57% market-wide. Median actual came in at 1.32x implied.

Last 8 prints, implied vs. actual:

The shape matters more than the hit rate. Sellers "won" 4 of 8 — but the two misses blew through at 3.8x and 3.2x implied, while the wins only kept 0.3–0.8x of premium. Right half the time for small amounts, wrong half the time for huge ones. That's the asymmetry that ends strangle sellers.

The weird part: DELL missed EPS in 6 of its last 8 quarters and the 1-day reaction was still positive half the time (+4.6% avg). EPS doesn't move this stock — guidance and AI-server backlog do, and that's not what the pre-print consensus anchors to. My guess is that's exactly why the straddle keeps coming in cheap.

Against me: this print is already priced at ±8.9% vs. DELL's historical mean implied of ±7.1%, so the market has partially caught on — the edge is thinner than the headline 1.32x. And 19 reports is a tendency, not an edge you size up on; the two biggest moves are both recent, which could be the AI era or could be two data points carrying the whole finding.

Not a direction call. Just a claim that the size has been mispriced for 19 straight reports.

Anyone who sells DELL premium into prints and has beaten this history — how are you managing it? Holding through has clearly been the losing side.

Sometimes I find good ideas to dig into from investor letters right now. I read them on seeking alpha but in the past I used to read them via kedm. Do you know of a good source for these. Ideally free?

I've been trading quant strategies for years, but equities only, no options. Out of curiosity about how the thetageang approach actually holds up, I backtested the popular wheel variants and measured CAGR, max drawdown, sharpe etc., to see whether any of it could complement what I already run.

Results were more interesating than I expected.

Total return doesn't beat buy and hold. That part isn't surprising. The real edge is the drawdown profile, which is the thing quant shops actually care about. Depending on your risk appetite, 12% CAGR at 17% max DD, or 11% CAGR at 7% max DD, is a perfectly respectable place to be.

The other surprise: wheeling NVDA came out roughly 2.5x ahead of wheeling the index on CAGR. I can't post multiple images here, so no equity curves, but the gap is not subtle. The hard part, obviously, is ideantifying stocks like that ahead of time ranther than after. You need fat premium sustained over years, and it's very easy to fall into the survivorship bias when selecting the tickers to wheel today.

I also have the per strategy breakdown(mechanics, Sharpe, max DD, CAGR) published to my quant website. Not sure whether links are allowed in this sub. Happy to drop it in the comments if a mod confirms it's fine.

Keep it friendly and civil; this is not WSB and automod will censor your posts at will for unsavory and unfriendly remarks. Try to keep shit posting and bragging to a minimum.

The idea that options overprice earnings moves gets thrown around as a blanket excuse to sell premium into every print.

But true on average and true everywhere aren't the same thing.

If the edge only lives in certain prints, selling into all of them is how you get run over by the exceptions.

So, I took every earnings event I had clean data for and bucketed it by how big the implied move was going in.

The answer wasn't blanket at all.

The data: 128 liquid optionable US names, 2,354 earnings prints, Jan 2007 through Aug 2026.

Options-implied expected move going in vs. realized one-day move coming out.

The finding: it's not true everywhere. It's barely true at all outside one bucket.

Mean implied move |Names |Prints |**% overpriced** |Mean implied |Mean actual |Gap
under 4% |30 |576 |56.9% |3.13% |3.06% |+0.07 pts
4% – 12% |77 |1,408 |54.6% |7.58% |7.96% |−0.38 pts
12%+ |21 |370 |65.7% |14.87% |12.05% |+2.82 pts

The middle bucket is where almost everyone actually trades — your AMD, MU, CRM, UBER type names — and the gap there is **negative**. Options are slightly too *cheap* into those prints. You win 54.6% of the time and lose money doing it, because the 45% of prints that go against you go further against you than your wins pay.

The sub-4% bucket is a rounding error. +0.07 percentage points of implied-vs-actual gap is not a strategy, it's noise you're paying commissions to collect.

All of the edge is in the 12%+ bucket, and it isn't small: implied 14.87%, realised 12.05%. 14 of those 21 names overpriced on more than 60% of their prints. The worst offenders:

Ticker |Prints |**% overpriced** |Median actual ÷ implied |Mean implied |Mean actual
SOUN |16 |93.8% |0.53 |15.2% |8.8%
LCID |19 |89.5% |0.77 |13.6% |8.7%
RGTI |15 |86.7% |0.45 |18.8% |8.3%
BBAI |19 |84.2% |0.49 |17.3% |11.5%
HUT |18 |77.8% |0.37 |27.2% |9.1%
PLUG |19 |73.7% |0.57 |12.4% |9.1%
HIMS |18 |72.2% |0.61 |17.3% |11.2%

HUT's options have priced an average ±27.2% move and the stock has averaged 9.1%. Median realized/implied of 0.37. That is the trade the folklore describes, and it lives entirely in the part of the market most premium sellers have a rule against.

The catch, and it's a real one: the same bucket contains the four worst names in the whole study for a seller.

Ticker |Prints |**% overpriced** |Median actual ÷ implied
LYFT |20 |45.0% |1.21
AFRM |18 |44.4% |1.10
CVNA |21 |42.9% |1.20
UPST |19 |42.1% |1.19

UPST priced an average ±17.6% and delivered 23.3%. Consumer credit and rideshare names sit in the high-IV bucket and underprice their prints, so "sell anything above 12% implied" gets you run over by exactly the four names you'd have picked for liquidity.

What I think is going on: the 12%+ names are the ones with heavy retail call demand into the print — the meme-adjacent, story-stock, quantum/AI/crypto-miner end. That demand has to be sold to someone and the someone charges for it. The mid bucket has no such imbalance, so it prices efficiently, and efficiently priced means no edge for either side.

The four exceptions are names whose earnings genuinely can reprice the business (a credit book, a unit-economics turn), so the fat implied move is warranted.

Method: every print where I had both a recorded pre-print options-implied expected move and realized one-day post-earnings move. Straddle-equivalent, one-day hold, no delta management. Missing either side and the print was dropped, not estimated. Buckets are by the name's mean implied move across its own history, prints-weighted within thebucket.

Caveats, because they matter:

- The gap is implied-minus-realized, not a P&L. Before commissions, slippage, and the bid/ask on a straddle in something like RGTI, which is not tight.

- The universe is names that are liquid and optionable *now*, so it's survivorship-tilted toward the story stocks that survived. Several of the 12%+ names have short histories.

- 370 prints across 21 names are enough to see a gradient, not enough to bet size on anyone of them.

The takeaway I'd defend: the bucket you trade decides whether you have an edge, and the aggregate options overprice earnings claim is averaging a real edge on 21 lotteries tickets with a slightly negative one on the 77 names everybody actually sells.

Genuinely curious whether people selling the mid bucket profitably are getting it from something other than the implied-vs-realized gap — width capture, delta management, closing early at 50%. Because it isn't in the gap.

from Barrons, not my take

”Historically, these cycles have followed enough of a pattern to consider where artificial intelligence falls in the cycle. One could be dubbed the rule of 25, for the amount of total spending the U.S. has been able to digest during transformational booms as a percentage of the overall economy. At the start of the railroad boom in the 1860s, for instance, U.S. gross domestic product was about $10 billion a year, according to the National Bureau of Economic Research, while rail spending eventually totaled $2.5 billion before the 1873 panic arrived. Similarly, about $1.5 trillion was spent building internet infrastructure in the late 1990s, while the U.S. economy was only $6 trillion at the time. The same holds true for the industrial and electrification buildout of the 1920s.”

“Using that standard, it’s possible to generate a top-down estimate of how much can be spent on AI before the economy is ready to collapse under its own weight. With U.S. GDP at roughly $30 trillion, the danger zone sits at about $7.5 trillion, or an additional $5 trillion to $6 trillion in domestic AI spending. Hyperscalers are projected to spend $3.7 trillion globally through 2029, and they aren’t the only ones, with Oracle, SpaceX, Anthropic, and OpenAI, among others, building, too. At this rate, AI spending won’t trip the rule of 25 until the early 2030s, six or seven years into the boom.“

Mine, currently:

1. nothing where the implied move is under 5%, isn't enough premium in it to be paid for the tail
   
2. nothing where the bid/ask on the straddle is more than about 8% of its mid, because the edge is thinner than the spread
   
3. no defined-risk earnings play where max loss is more than one normal winning day

What's yours?

Disclaimer: This is for experimental purposes, it is to demonstrate and track wheeling and longing on leveraged products, which started mid-June of this year. This retirement account was blown through testing various trading strategies and poor position sizing in relation to risk.

The strategy is to use leveraged products to long and to free up capital for puts & dry powder. Write weekly CSPs on LETFs by selling .03-.09 delta puts. Then, DCA shares into a small leveraged position (~10%) of either LEAPS/LETFs. Lastly, sell covered calls on the LETFs, and calling them away when we need to size down.

I bought calls on SOXS with a sold SOXL put to function as a synthetic weekly put credit spread but I closed it early. I also decided to buy a 3mo 10% otm SOXL put later on as a better replacement for hedging, held it for a few days before I sold it off too. The intention was to hedge the portfolio & the weekly puts against short-term volatility, but as I read more about hedging with puts, it seemed like it simply causes an overall underperformance. The better hedge was to just adjust your risk and size, rather than buying an expensive premium that’s priced by demand & time and will also have a constant drag on the portfolio.

All realized losses this week were from options that were from hedging with buy-to-open contracts. Keeping strategy and sizing as is next week, no more tinkering.

approx.
90.4% $USD & CSPs
9.6% Leveraged (6.0% TQQQ, 3.5% AGQ)

Keep it friendly and civil; this is not WSB and automod will censor your posts at will for unsavory and unfriendly remarks. Try to keep shit posting and bragging to a minimum.

Last three years I have almost always been unhedged. Barring some Spreads that have a hedge built in, I have relied on dry powder to be my savior when markets turn down.

How do you hedge? Portfolio level? Position level? Something else?

I have an ai market scanner that I use to help me find solid opportunities to sell CC and CSP or just buy shares. I didn’t realize how undervalued GOOG was recently though. I know they made a lot on their anthropic investment, but a PE of 17 feels hella low for Google.

Anyone else selling PUTs on GOOG now? I’m considering loading up some leaps for some nice cash. I don’t see how Google could really go sub 13-14 PE.

What do yall think about this type of play? Anyone else selling them?

(options noob, not a book seller)

Options Volatility and Pricing, Natenburg

Volatility: Practical Options Theory, Iqbal

Volatility Smile, Derman and Miller

EDIT: Thanks for the useful replies! I plan to start with Spina.

I was at a work thing yesterday and didnt get a chance to post this. I did make my pre-trade post here - https://www.reddit.com/r/TheRaceTo10Million/s/r4cQTmh9NL. I was trading in between breaks so was mostly just rolling. Also by the end of the day things had fallen so have a higher drawdown right now. Last week's post - https://www.reddit.com/r/thetagang/comments/1vujnlv/1_weekly_returns_from_options_week_25/

Strategy:
- Use a screener to give me a list of top 20 low delta options for next week
- I either
- a. Roll my current options - I do this if I can still get 1% for rolling or if the option is ATM/ITM and I have to roll. I always roll for credit.
- b. Close a current option and pick something else from the list that I like
- I try to do this every Friday. However, if I'm busy on Fridays, I'll sometimes do this on Thursdays.

Trades made yesterday:

Returns so far

Historical Performance

Got my 911 today. About to go for a drive!

I mainly use Seeking Alpha but lately the quality of of work on seeking alpha has not been so great or I have not discovered it. I still like it and pay for it. Which free and paid tools you use to identify companies and manage your portfolio.

Yahoo finance

Finviz - Screener.

X - I follow a small group of investors for ideas

Youtube

I usually close early at 70% profit like people always recommend, but this week I’m letting them expire just for the rush. I actually captured more profit than shown here on the call side, because earlier in the week I closed early then decided to scalp an extra grand by entering back in. Total profit: $30,788 as long as nothing crazy happens after hours.

I have noticed that if you open these on Friday or Monday, as long as the price trades favorably sideways, by Thursday morning the time decay really starts to accelerate and there is usually a good opportunity to lock in profits then.

MU the only thing keeping my portfolio green against my META, RDDT, RKLB bags.

EDIT: Whoops, I cropped out the column headers. If you need them they are: Total P/L | Daily P/L | Total P/L %

$10,737 in realized premium. $12,764 in new open premium with an ROI of 6.36%. Underlying share prices fluctuate daily. As of today Friday 8/28 -$5,130. All-in net as of today +$5,560.

Most premium sellers don't show or closely monitor the daily underlying shares movement as that changes daily. Yesterday it was plus $3k. I added the optional view as many people have asked or commented about it. And most of this was the drop in $NBIS which I still have a open covered call on.

I traded a SPY 775/774/768/767 0 DTE short iron condor today and started off with a bad entry at $0.32 (50 cts). The market trended bullish to $775, so I decided to quadruple down at $0.50 (145 cts) for an average of $0.45 (195 cts).

I thought the market was going to move sideways for the rest of the day, so I was going to hold my position until near market close, but then the market fell hard to $768 which is where my inner leg was... Then it kept testing $768 near market close... lol

It was pretty stressful, but fortunately I still held and was able to close my position below $0.10!

Keep it friendly and civil; this is not WSB and automod will censor your posts at will for unsavory and unfriendly remarks. Try to keep shit posting and bragging to a minimum.