The Beginner's Guide to Trading Strangles (Safely & Profitably)

[@optionswithdavis]

Get Your Copy of My Strategy Blueprints For FREE: 1) The Options Income Blueprint: optionswithdavis.com/blueprint/ 2) The Credit Spreads Blueprint: optionswithdavis.com/cs-blueprint/

[@Virtues162]

Thanks Davis for the great video as usual ____ Is it not better to leave a losing trade until expiration or until BPE is consumed than closing it on the 21 DTE? Many thanks!

[@jomara68]

The problem with strangles is the high buying power required. Small account people have to do iron condors

[@purelife9000]

Iron condors are also sooooo much more efficient in terms of return per capital invested because with, let's say a $100 spread on each leg (or wing) one can put on 50 or 200 IC for each strangle position. Sure one would pay more in commissions, but the efficiencies outweigh those by allowing one to get a 50 or 200 x return with equal risk exposure.

[@yanatomlbb6949]

@@purelife9000 i doubt that 50 or 200 x return, in order to put on 50 IC i will take it as $5 width, u need $50000 for margin, in case worst scenario happen. so by using $50000 to earn $10000 as compared to the lets say XSP strangles need a $90000 margin for $900 is a 25% : 1%, 25x return is true

[@thomaskreisel5764]

@@purelife9000 Thats what I was thinking, a Strangle is basically an uncovered Iron Condor. When to chose an Strangle and when to chose an Iron Condor?

[@ramaraksha01]

@@thomaskreisel5764 Anything uncovered is scary - the market can crash or move up at any time based on events - if it had bought Tesla call options before the elections, I would be rich by now & those people who sold uncovered calls are in a world of hurt right now

[@hipchecker2063]

Lots of great information from you.

[@boomerbill8115]

Hi Davis ... great info as always. Other videos I've watched on trading don't really dive into the trade and risk management like you do. I have a question do you take IV into consideration when you manage strangles?

[@Marcius78LT]

Great video! I have a question about rolling. What do you do with the tested site when it goes deep ITM. When it is tested there is big loss already but if you roll just untested side and leave tested - there will be even bigger loss when you will go deep ITM. Do you open this trade as a combo or separate? Thanks.

[@optionswithdavis]

You can watch my video on rolling strangles here: kzbin.info/www/bejne/nmjJZKpqrJaIn9ksi=oYuge4LuMAf3trTg

[@Marcius78LT]

Thanks!@@optionswithdavis

[@greg.ocallaghan]

Great video. Do you have a video as well on how you would manage a portfolio with various short strangle positions? i.e. for a portfolio of a given size, how to decide how many trades to have on, how to size them (finding balance between diversification and making sure you have enough trades on, and sizing) which underlying to choose and when (based on IVR/IVP?). I understand all these concepts but I’ve never seen how to put it all together into a portfolio.

[@jacobbrnnum3013]

Nice video - How many DTE is your entry ? in order to exit latest at 21 DTE

[@BrenAndJo]

He mentioned in a few videos and TastyTrade as well that taking the trade closest to 45 DTE is the most ideal for both premium and the amount of risk you’re taking

[@leond7879]

Hi great video, what is the cagr for this strategy? it would be helpful to do a comparison(returns, volatility etc) with the SPY. I think it will be helpful to show your viewers strategies that can beat the index and if the strategy can't beat the index you may then qualify it in your video. No point showing viewers a strategy that can't beat the index, they are better off investing passively, It would be good for educational and knowledge purposes though. Thanks for the video. Hoping to see more quality content from you.

[@hsmok81]

Thanks for the sharing. Have you ever use automated trading ? would like to know the possibility. Thank you

[@eliotkindy]

How do you get your average losses to be so small comparatively? This is the key to making this strategy having a decent positive expectancy.

[@TonyDisP]

How long did it take to complete the 100 trades? For your strangle entry, isit mechanical or discretionary? If its mechanical, do you consistently open a new strangle position ie every day? tks

[@BrenAndJo]

Hi Davis, can I ask how is it possible that most of your winning trades in the spreadsheet you showed in the video has greater than 50% of the initial premium collected? If all were to exit when there’s 21 DTE left on a 45 DTE trade, the maximum profit for the trade at 21 DTE left would be barely half usually unless it’s a 60 DTE trade. Care to share if the trades taken are greater than 45 DTE instead? Thanks!

[@guyredares]

you didn't mention what underlying you traded, how many DTE the position originally was, the IV%..

[@sergebrosseau2593]

usually is close of 45 dte or 90 dte. 2 questions higher iv is better for entry because lest risk but me personally i don't wait for height iv.

[@tanhakkoon]

💪, Do you also diversify your holding into different sector ? Able to share the list of stock you used for the result shared ?

[@optionswithdavis]

Generally, this strategy can be used on any underlying, but my preference is the index etfs.

[@tanhakkoon]

@@optionswithdavis Thanks, do you also consider leveraged ETF like TQQQ or UPRO or SOXL as "index etf".

[@optionswithdavis]

Nope, I don't trade leveraged etfs.

[@thomaskreisel5764]

@@optionswithdavis On what DTE do you open strangles?

[@chris2884]

How can you determine BPR if your platform doesn’t do it for you

[@tangancepat7613]

Hi Davis, thank you for the videos and e-book, Can you make tutorial options using TWS Interactive broker? Because In my country only can using IBKR. Thanks in advance.

[@ufogovernment6039]

hello davis, isn't iron condor better than short strangle?

[@philsummers579]

Hi Davis, I could have sworn that you said in a previous video that one of your trading rules is to never go naked. Am I wrong? Thanks for the vid by the way. Call me a prude, but I will never go naked!

[@williamklein6749]

You sacrifice several things by refusing to trade naked. 1) You get more credit for a straddle that an IC. 2) You pay less commissions. 3. Much easier to manage.4. Easier fills means less slippage. I understand you give these advantages up for peace of mind. But if you are going to close your trades at @ 21 dte the insurance you are buying is very expensive over time for what you get. Check out this video for specific examples of what the IC or spread is costing. kzbin.info/www/bejne/ioSYnp-dgLx8nbM

[@LMF-ct4lt]

What is the worst case scenario with this trade? What if the price jumps up $30 or the price drops $30 in one day?

[@eliefeinstein6182]

What’s your profit factor (total profits / total loss) for this strategy? Max drawdown? Also, do you backtest your strategies before trading them? What underlying did you trade? Are you including commissions and other transaction costs in your trading journal?

[@jacek6863]

what strategy are you used here? one strategy or more?

[@waitongli3455]

Strangle is a high risk strategy especially for a high volatility stock, even if you sell them on 20 delta，just one day high fructuation would place you in extremely unfavorable position, better to stick to iron condor stategy with limited risk exposure.

[@williamklein6749]

Your max loss strategy is 10x your initial credit and you show that as equaling the buying power required. But your max loss in your log is only 3x your credit. ( $ 9.44 on a $ 3.06 credit) If 4% of your trades go to your max loss you'd be a loser. And it's extremely possible for 10 trades out of 100 to go this bad. Is it possible you take losses at a lower amount and just save that max level for some sort of emergency? Trade management can explain some of this but not the difference between 3x and 10x.

[@albertodeulofeu5277]

Of course it’s possible. That’s why you manage the trade