/biz/ - Business & Finance

>>50690651
>>50690631
Also on further thought, I don't think it's fair to directly compare CCs with wheeling (which I understand to be CCs plus CSPs), since they have way different risk profiles (or it looks like Optionstrat considers it a covered short stangle)

As far as a strictly premium harvesting strategy, it does in fact look like you're taking on a lot of unnecessary risk. For example with WMT, which is typically low IV, you set your strikes to 2 SDs away so they don't get exercised, you make $28 and move on with your life. But you're long 100 shares (at let's say $120); you still have to pay the spread difference x100 for every dollar it drops below $110 in picrel. You're literally getting a 0.2% return against your entry point in exchange for having to eat shit if something happens (and historically it's much easier for a largecap to drop than it is to explode in price).

So at the very least, I'd much more likely recommend doing CCs and avoiding short puts in the context of premium farming.
If you're selling strangles, then you'd best do it as part of a horizontal or condor spread and do it based on IV movements imo