Thank you /Biz/ For Helping Me Get Rich With Theta Gang

[Anonymous No.24793068]

I'm only 22 years old, just about to graduate, and have more money than I know what to do with because of THETA GANG, a strategy I learned on /biz/.

>Had money from working at Macdonalds, saved up $10,000 by 18
>Learned about Theta-gang
>Just buy stocks, sell covered calls that expire in a week or two that are just 5% out of the money
>Realized doing this yielded a return of 1-3% WEEKLY.
>Sometimes I lost money because the stock dropped by more than the option premium, ok, shit happens
>Overall yielded a 45% return first year
>Show dad
>Impressed
>Borrow $50,000 from dad at 5% interest (he's used to GICs which pay him less)
>Generate $19,000 that year off selling covered calls, pay him $2,000
>Borrow enough money to have $100,000
>Turns out to be a good year
>$52,000

How is everyone not doing this? Theta-gang literally works. Just buy stocks and sell out-of-money calls on them that are a few percentage points above the strike. It yields CRAZY returns.

[Anonymous No.24793108]

because they're all greedy fucks

[Anonymous No.24793111]

>>24793108
Greed is good

[Anonymous No.24793123]

>>24793108
How is making 40% returns not good enough for people? If this works continually I'll be a millionaire before I'm 30 EASILY.

Other than the risk of these stocks crashing, I can't see a single flaw in my strategy, and this strategy actually MITIGATEs the chance of stocks crashing because the premium will soften the blow.

[Anonymous No.24793130]

>>24793068
huh u read a book or something ?

[Anonymous No.24793138]

>>24793111
>>24793108
I'm seriously wondering why more people aren't doing exactly what I'm doing the point of bidding down the options to be unprofitable.

I'm making FAT returns and I'm not even that smart. There's got to be some catch to this. I feel like I discovered the golden ticket to wealth.

Why would I ever start a business with a profit margin under 40% at this point?

[Anonymous No.24793142]

>>24793111
no, making money is good

[Anonymous No.24793177]

>>24793068
You just had luck picking stocks which performed particularly well. There is no straightforward way to beat the market with any options strategy. Otherwise, everyone would do it as you figured. As a proof, look at this analysis which did the covered call strategy on the S&P 500:
https://cdn.cboe.com/resources/indices/documents/pap-assetconsultinggroup-cboe-feb2012.pdf

Essentially, the analysis finds that no options strategy (including the one you describe which they call BXY) consistently outperforms buy & hold.

[Anonymous No.24793178]

>>24793123
>How is making 40% returns not good enough for people? If this works continually I'll be a millionaire before I'm 30 EASILY.
I thought the same in 2017 but actually if I worked and bought the bear market instead of fucking around and NEETing I’d be pretty much a millionaire at 24 now, good for you ill look into it

[Anonymous No.24793185]

>>24793111
Kek Robert made his money selling you a book. Rich Dad never existed

[Anonymous No.24793241]

>>24793123
Actual inflation of commodities is 30%, so enjoy making 10% YoY

[Anonymous No.24793247]

>>24793123
What do you do when the stocks crash? Do you want to hold them up again so you start selling higher strikes to avoid getting assigned or just wait with selling calls until they are back up? Or do you just keep selling 5% above and take the hit if you get assigned?

[Anonymous No.24793248]

Those returns aren't even close to what you'd get hodling BTC.

[Anonymous No.24793291]

>>24793177
Those are on large funds, market movers that alter the bid price just by making a purchase.

With small funds you don't touch the market.

And the thing with this strategy I've been doing is that it doesn't even require the market to go up. As long as a stock remains flat or increases I make this return. The only time it fails is if the stock drops by the amount of the premium in 7 days or less, which does happen but is rare.

>>24793178
Well I'm happy with this.

[Anonymous No.24793307]

>>24793247
When the stocks crash I repurchase the options and then sell the stock. I accept my Ls

That does happen, but not enough to compensate for the 1% weekly returns I usually get just from selling the calls.

If my strategy worked every week, I'd make 72% returns, beacuse sometimes the stocks drop, I only make between 20% to 40%.

STILL GOOD ENOUGH FOR ME

[Anonymous No.24793320]

>>24793248
I'm not gambling on a crypto coin with borrowed money

[Anonymous No.24793375]

>>24793291
>Those are on large funds, market movers that alter the bid price just by making a purchase.
>With small funds you don't touch the market.
I don't understand what you mean. Those indices are just synthetic in the sense that they don't actually sell options. They just track hypothetical portfolios which follow specific options strategies.
>And the thing with this strategy I've been doing is that it doesn't even require the market to go up. As long as a stock remains flat or increases I make this return. The only time it fails is if the stock drops by the amount of the premium in 7 days or less, which does happen but is rare.
By doing this strategy you're capping your upside while still having unlimited downside. If the stock pumps you're going to lose a lot of those gains by getting assigned.

That being said, the options market is one of the most efficient markets in existence. You're not betting against degenerate gamblers, you're up against institutional investors. Very smart people have developed sophisticated models to accurately model option prices. Do you really believe that you've found an edge by just selling weekly covered calls?

[Anonymous No.24793594]

>>24793375
>Do you really believe that you've found an edge by just selling weekly covered calls?

Yes because it's been working consistently.

If I diversify my porfolio, and have like 10 different bundles of 100 stocks, each issuing one option per week. I don't see where the huge risk is, but I've witnessed the gains with my own eyes.

And these aren't super risky stocks either. I'm talking stocks like Geogroup (private prisons), I'm talking stocks like Apple, Amazon, Raytheon, Lockheed Martin, Coca Cola.

The risk is that these stocks will crash, but even if they do. I can just continually do this strategy.

If Coca cola crashed 50% that would suck for me, but as long as I could make 1% weekly by holding Coca-Cola I could easily make up for that 50% drop

[Anonymous No.24793609]

>>24793594
>>24793375
I'm well aware of the EOH but this has been working for me consistently.

[Anonymous No.24793665]

>>24793609
>>24793594
I'm thinking prehaps my premium comes from the fact that hedge funds and money managers want that key into the market at certain prices and are willing to pay additional costs for it.

[Anonymous No.24793693]

>>24793594
I have already pointed out in >>24793177 that you won't beat the market that way (covered calls on S&P 500 is equivalent to covered calls on all 500 stocks individually) and that logically it doesn't make sense to be consistently profitable. You're essentially arguing that OTM call options are systematically grossly overpriced.

Whatever, you won't listen to some random anon, and you shouldn't anyway. I'm just telling you that it would be wise to research the topic a little more in depth before dropping six-figures into it. The covered call strategy is not stupid, but it's also not the money printing machine you believe it to be.

[Anonymous No.24793728]

>>24793594

I like the idea of running the wheel better than what you are doing although your strategy is even easier.

-Sell puts at or near strike and get exercised to you buy at a discount essentially (put premium
-Sell covered calls in or incredibly near the money looking to get exercised again
-Rinse repeat.

You could probably go find div stocks that are about to pay out and solidify the strategy since their price almost always drops the exact amount of div payment days prior.

[Anonymous No.24793730]

>>24793693
I have researched this, and all the arguments against it have been bunk. The only one that makes sense is that you're limiting your upside but sitll have unlimited downside.

Which is true, but I'm willing to give up my upside since I never factored that in anyway.

Prehaps the potential for 10000000% returns, however small, is worth quite a bit since the potential reward is just so damn high. I'm sacrificing that and that's the returns I'm getting.

[Anonymous No.24793802]

>>24793728
The service I use charges massive commissions when options get assigned or exercised so I can't do that.

[Anonymous No.24793848]

id rather wager it alln microcap shitcoins.

[Anonymous No.24793973]

>>24793730
>>24793802
>> 22 years old. new to the markets
>> thinks he found a never fail winning strat.

kekked.

[Anonymous No.24794132]

>>24793973
Then why do I have over 100K at my age when most people have negative earnings?

[Anonymous No.24794165]

>>24793802

What do you use and what are the costs? I hear Interactive Brokers is supposed to be affordable and the UI is legit although its been awhile since I used them. I have some sick gains with crypto and always performed much better with them than trad markets but I'm tempted to withdraw at least 30K and sell real far out of the money cash covered puts or calls. Ones that have 99% chance of expiring worthless. I could do spreads but that takes more effort. I just want low profit but low risk and effort

[Anonymous No.24794179]

>>24794132

... Well it's not yours, is it? And your parents seems wealthy, which is helpful dont you think.

Congratz tho, anon. I wish you the best.

[Anonymous No.24794181]

>>24793802

I'll fucking cum if I can ever buy and sell puts/calls on my LINK holdings. So much money to be made fleecing retards on weeklies

[Anonymous No.24794205]

>>24794179
It's my money, my dad loaned me 50k and 100k at 2% interest. I've made 20 - 60% every year on it. personally own 105K in net worth and I owe 75K to my parents, my portfolio is a little under 180K

[Anonymous No.24794252]

>>24794179
And im not saying this to brag, I'd help anons here too if i knew why this wasn't done by everyone.

[Anonymous No.24794273]

>>24794205

You're gambling their money, your returns are crazy because this year is crazy.

Keep it going but be careful, your strategy will not work every years.

[Anonymous No.24794278]

>>24794252
... and I have repeatedly told you why this isn't done by everyone.

[Anonymous No.24794405]

>>24794252
I have a finance degree, worked in finance, and now I'm trading for a living. Let me give you some advice.

1) There is no free lunch. Literally everyone with a finance background knows about covered calls. Yes, you might make nice gains right now but like others here have said: you have limited upside and are not hedged to the downside. You have not found the secret to wealth.

2) If you ever do find some alpha, some working strategy in any market, the absolute worst thing you can do is tell anyone about it. As soon as you do, the opportunity will be gone.

[Anonymous No.24794413]

>>24793068
>How is everyone not doing this?
Because not everyone can borrow 50gs from daddy lmao

[Anonymous No.24794446]

>>24793307
>STILL GOOD ENOUGH FOR ME
Just remember you did this in a bull run.
Or maybe you lived through March, in which case give me your exact strat or link me where you learnt it pls.

[Anonymous No.24794463]

>>24794405
I've always been fascinated with people who trade for a living because I'm very sceptical about how feasible that would be. Of course I realize you're not gonna tell us any secrets. But could you roughly share what you're doing? Is it strictly TA? Have you found a specific strategy which seems to generate alpha? Do you often need to change strategies? Is your trading mostly by gut feeling or is it automated to some degree?

[Anonymous No.24794505]

>>24793068
That's awesome to hear OP. Might get back into theta gang soon.

[Anonymous No.24794564]

>>24793241
They're not trading oil or corn. What are you going on about?

[Anonymous No.24794607]

>>24793068
>How is everyone not doing this?
because it's only worth it if you can do this
>Borrow $50,000 from dad

[Anonymous No.24794809]

>>24794446
Yes but the market going up like 5% annually is a bullrun.

This is making crazy insanely high returns, even for that.

[Anonymous No.24795065]

Ahhh yes gold old picking pennies in front of a steamroller. You will get burned eventually if you keep going. You can‘t escape the tail events. Better stop while you are at the top.

>t. former quant, now trader

[Anonymous No.24795121]

>>24793123
I make 40% year just stock picking and rebalancing my portfolio weights.
You don't need an options' strategy for that.

[Anonymous No.24795164]

>>24795121
Ok then what are you doing here? Lets go be oligarchs like Buffet?

[Anonymous No.24795165]

>>24795065
>muh leptokurtosis
Yeah, there is absolutely no way to avoid it, right fellow brainlet?

[Anonymous No.24795184]

>>24795164
Because I didn't start with a loan from daddy and I live in a "poor" country. I started with 6k€ and I'm on 15€ now.

[Anonymous No.24795205]

>>24795184
Yeah but if you're consistent with making 40% a year then you're set for life. Compound interest will eventually make you rich.

[Anonymous No.24795232]

>>24795205
I might have been lucky. I mean, I certainly was to a degree, since this is all stochastic.
Also, that won't happen because I'm quitting my job next year to start my own company, and I will probably have to take out money from my portfolio to be able to cover living expenses for an year or two.

[Anonymous No.24795275]

>>24795232
Why would you start a buisness if you can earn 40% a year? I can bet you that is a higher return than any business you start will get you. Most small businesses have a profit margin of 1 - 2%.

[Anonymous No.24795312]

>>24795275
Because I care more about intelectual pursuit than being rich. It's a highly specialised idea related to artificial intelligence and mathematical optimization.
Also, trading isn't guaranteed to work indefinitely and I need to cover living expenses, and I don't have enough capital for that.

[Anonymous No.24795324]

>>24793138
call volumes and OTM call volumes are at ATHs right now. You are literally engaging in the golden era of call selling

[Anonymous No.24795411]

>>24795312
If you borrow money and invest it at 40% you'll be fine

[Anonymous No.24795435]

>>24793068
Just get 50k off your parents bros

[Anonymous No.24795438]

>>24795411
I don't do credit.

[Anonymous No.24795452]

>>24795438
Then how are you starting a business?

[Anonymous No.24795522]

>>24795452
I have enough money to live and I only need a pc and my brain at first.
I plan to have a minimalistic company with minimal bureocracy that only uses opensource software and the only expenses are buying pcs and employee expenses.
I also don't want to scale it up, the goal is really to apply my time to something that I find interesting and meaningful, instead of slaving for some employer doing tasks that amount to nothing.

[Anonymous No.24795578]

>>24795165
Yes hedge that tail and pay the pennies you earn from your next level option strategy.

ITT retards making money in a bull market and thinking they are top shots.

[Anonymous No.24795620]

>>24795578
>NOOOO your gains don't count!!!!
>If this was a real market only "value" strategies would work!!!
>Oh no, your sharpe ratio is too low, tour vol is too high, tou didn't scale your portfolio weights which vol?!?!?!? Are you MAD?!?!?

[Anonymous No.24796809]

>>24795578
The covered call strategy works in every market you dummy.

[CLF Chad No.24796828]

Theta gang theta gang theta gang

[Anonymous No.24796855]

>>24796809
ey op

[Anonymous No.24797195]

>>24793068
>MickeyD employee thinks he found a way to hack the market for unlimited riches
But MickeyD moron will eventually be schooled by the market. Can't wait to see you give back all your gainz

[Anonymous No.24797250]

>>24795522
I don't mean to disrespect your digits but this hsrshly ascetic scarcity mindset is probably too conservative. Some risks need to be taken.

[Anonymous No.24799131]

>>24793068
Sign me up. Where do I start? Would you recommend any books?

[Anonymous No.24799389]

>>24799131
And here comes the new retard who also believe it's free money without understanding the risks. Can't wait for you to lose everything too

[Anonymous No.24799408]

>>24799389
that's what the books are for. if you know any, please recommend them

[Anonymous No.24799588]

>>24793068
Congratulations, but that's too slow for me, I started with 800 bucks in shitcoins late September and made tens of thousands of dollars, but screwed up two chances of making 100k twice, once over the course of a week and then over 6 hours, I got so pissed and insane that I then threw out all of my money and am left with 2k only. I don't want to start over, I'm going to have to pay with my life, I didn't need any of this money, but I'm 18 and it was my only future, I threw out more money than my life was worth and now it's time to pay lol, that's how it goes

[Anonymous No.24799666]

Implied volatility is higher than realized volatility in the long run. Selling options is profitable on average. Buying options is unprofitable in the long run.

[Anonymous No.24799747]

>>24799666
*if you dont have an edge
There is nothing funnier than seeing option sellers making it year after year and losing it all on that 1 'unlucky' trade

[Anonymous No.24799756]

>>24799666
Evidence that implied volatility overestimates realized volatility.
Also checkem

[Anonymous No.24799892]

It seems like as you make more, and start risking more, your exposure will simply get that much bigger and then the day that doom event happens you'll lose 80% of your gains

[Anonymous No.24801306]

>>24793068
Because here in yurop there aren't any options brokers that don't charge ridiculous spreads or commissions, so we can't use your robinhood theta strategy

[Anonymous No.24802470]

>>24793185
>he didn't pirate it

[Anonymous No.24802533]

>>24793123
>If this works continually
There is your problem.

[Anonymous No.24802757]

>>24793068
Chad MATLAB user identified

[Anonymous No.24802814]

>>24793068
delete

[Anonymous No.24802856]

>>24793068
everyone is a genius in a bull market. If stocks go down you are fucked.

[Anonymous No.24802955]

>>24794181
AUC

[Anonymous No.24803756]

>>24793138
>I'm seriously wondering why more people aren't doing exactly what I'm doing the point of bidding down the options
because in one bad swipe you lose a lot of money?

[Anonymous No.24803956]

>>24793068
thetagang is alright in very high IV environments but it generally underperforms buy and hold and ETF rotation strategies. don't think you found the holy grail OP