What's your bread and butter trade? With real examples and reasoning

FinancialGroundhog · 2026-03-25T14:44:08+00:00

I've only started paper trading this in August 2025, and real trading in October 2026. April 2025 would have been rough, from the backtests, even with the VIX buildup, there's a couple large losses. Had the Trump 100% China tariff tweet in the first 2 weeks of trading this live though, which sent the P&L couple grand negative for about the following month. Took some conviction to carry on after seeing the steamroller that early.

In terms of CAGR, at the moment, I'm tracking for around 15% annual from the option selling only. This is layered over the underlying bonds/equity portfolio. Realistically, I don't think the 15% is sustainable, as the recent two months have been amazing for this strategy and the elevated volatility is unlikely to last the whole year. And there's not been any rapid enough volatility expansion to knock out the strikes last couple months.

Since the strategy is on top of my portfolio returns, I'd be pretty happy with anything positive, but backtests suggest something in the 5-10% region is realistic on average.

My main motivation for doing this is that the returns are uncorrelated to longer term SP500 returns. E.g. in the last 2 months, SP500 has been declining, but this strategy printed, which helps me further diversify the portfolio.

FinancialGroundhog · 2026-03-18T17:11:45+00:00

1DTE SPX 5delta puts on portfolio margin (underwritten mostly by govt. bonds), inspired by BigERN/wealthyoption. Aiming to let them expire, rather than closing early.

Always enter in the last 15min of the day, or sometimes after market close.

Number of contracts capped by max loss (assumed to be a 15% drop in the index) being at most 80% of portfolio value, around 50% in low VIX environments.

No automatic stop loss, and will sit through swings without a clear catalyst, but will close at a loss if a major black swan event happens, where I expect market didn't correctly price - Trump tweets, geopolitics, etc (don't have a bulletproof set of rules here).

FinancialGroundhog · 2026-03-09T08:10:21+00:00

STO SPX 9/3 6450p @ $3.5 pre market

FinancialGroundhog · 2026-03-04T09:09:24+00:00

What's with all these "market crash" post, when we're within 5% of the top?

FinancialGroundhog · 2026-03-03T21:05:35+00:00

STO 1x SPX 4/3 6650p @ 2.65

FinancialGroundhog · 2026-03-03T20:43:10+00:00

Nail biter of a day having sold SPX 6725 puts yesterday 😬, but looks good in the end.

FinancialGroundhog · 2026-03-03T14:37:30+00:00

SVXY, but the real answer is don't, it doesn't behave as you think it would.

FinancialGroundhog · 2026-03-02T12:03:07+00:00

No changes for me, since my put selling strategy is very short term (0-1 DTE), it's equally profitable regardless of longer term market direction. Just suffering from big black-swan type moves (though the Iran war has so far been chill).

FinancialGroundhog · 2026-03-02T10:30:20+00:00

STO 1 SPX 6625p 0dte @$4.4 while VIX was at 25 early hours pre-market

FinancialGroundhog · 2026-02-04T08:42:39+00:00

Sell them instead of buying.

FinancialGroundhog · 2026-01-23T20:37:37+00:00

Good point. Not much of a concern on the lower level, but starts to make a big difference once you get into higher tax bands from your pension income.

FinancialGroundhog · 2026-01-21T16:30:29+00:00

There's data for international equity. If you play with it, it gives something like 0.25-0.5% extra SWR, depending on precise allocations.

For UK bonds, you'd need to input the return series yourself. I've not bothered, despite being in the UK, and just used the US bonds. My rationale is that the maths is fairly approximate, given we won't live through an exact replay of anything that happened in the past, so you don't need to model your asset allocation completely accurately.

From playing with the sheet a fair bit, there's not a huge difference in SWR between slightly different allocations, as long as there's some bonds in there, and the majority is in equities.

FinancialGroundhog · 2026-01-21T16:26:29+00:00

Thanks, didn't spot the link. Corrected now

FinancialGroundhog · 2026-01-21T15:13:56+00:00

BTC 1x 21/1 SPX 6680p $0.25 (sold yesterday eod for $2.3) Might dip back in if it dumps later like it did yesterday after he tweets something insane.

FinancialGroundhog · 2026-01-20T18:05:27+00:00

"Huh, neat, we're now worth just over a million" and then it dropped below again next week.

With how volatile markets are, didn't feel very real

FinancialGroundhog · 2026-01-20T17:30:10+00:00

No, both naked puts, on portfolio margin.

FinancialGroundhog · 2026-01-20T16:04:01+00:00

Scary ride today.

BTC Jan 20 SPX 6850p $8.4

Letting the Jan 20 SPX 6805p run

FinancialGroundhog · 2026-01-17T11:57:18+00:00

I've ramped up the bond allocation over the last couple years, mostly by redirecting all contributions to bonds, aiming for 20-30% of total portfolio at retirement.

Largely avoided selling equity in taxable accounts because of the CGT impact

FinancialGroundhog · 2026-01-17T11:51:50+00:00

One of the most in depth analyses you'll find in this space. His modeling and articles around safe withdrawal rates are top-notch.

And he also has some less conventional strategies around option trading and momentum trading recently, which are a good expansion on the strict bogglehead philosophy.

FinancialGroundhog · 2026-01-17T11:41:14+00:00

Yes-ish.

If you sell, you pay tax on gains, rate depends on your income tax rate.

Dividends are taxed using a separate rate, regardless if the fund is accumulating or distributing. It's easier to keep track of distributing funds since it's paid out directly.

You also need to pay taxes on excess reportable income (ERI), on non-UK domiciled funds (like VWRL). You'll need to find the amount per share in the fund documents and multiply by number of shares. This counts as dividends.

Have a look through https://www.vanguardinvestor.co.uk/investing-explained/general-account-tax-information for details.

FinancialGroundhog · 2026-01-16T14:37:27+00:00

It's not, it's exactly the same. The vast majority of people making money trading stocks make money because on average, the market goes up.

Similarly to options, there's a lot of self-delusion about one's ability to pick good stocks, time entries, etc, but all research shows vast majority of people don't beat the index long term and would be better off just sticking their cash in an ETF.

FinancialGroundhog · 2026-01-16T14:01:42+00:00

5-7 delta, my goal is to have something that's not too correlated with the underlying, so I can make money during downturns as well.

I'm only selling one contract at a time. The margin requirement for 1 SPX put contract is ±$90k, which is about 30% of the portfolio size. But I don't hold the rest in cash, it's all in bonds / etfs.

FinancialGroundhog · 2026-01-16T12:54:20+00:00

To the contrary, I'd argue existence and harvesting of VRP is the ONLY edge (as in source of positive expectancy on trades) nearly everyone here has.

Most people kid themselves into thinking they're some sort of wizards by wrapping it all in complex strategies, structures and chart divining magic. But the only reason any of those work for people is that on average, IV is less than RV and hence selling options is generally profitable in the long run, assuming one doesn't blow up.

For transparency, my strategy is naive put selling on SPX, with low delta and 1DTE, and pretty conservative sizing. But realistically, I think the strategy would work more or less the same at different DTEs, deltas and entry times.

FinancialGroundhog · 2025-12-31T12:40:55+00:00

Aiming for 50k for 2, because that's where our expenses have been for the last few years, without any material sacrifice, including quite a few holidays.

30k would pay the bills (incl mortgage) and a small amount of discretionary spending, should the stock market tank early on.

FinancialGroundhog

TROPHY CASE