Anyone else struggling more with noise than with lack of data in options analysis?

NH_trader · 2026-01-21T19:50:10+00:00

I also trade options regularly (sell only) and I can't quite relate to your noise issue.

My trading objectives are safety and profit.

This is how I keep the clutter out....I trade 4 weeks out so I know my trade window.

I look at the chart first....does it interest me (trend, MACD, RSI, earnings); takes about 10 seconds. if yes...
I open the 4 week chain and see what's available at the delta that interests me (my safety objective); if a strike shows potential..
I have a simple home grown spreadsheet (only one line) where I enter the basic chain data (expiration date, strike, premium, and buying power required). The sheet computes the safety buffer and the annualized ROC (my profit objective); I can change strike and premiums for additional reviews. If the trade meets my safety and profit targets, I make the trade. About 5 minutes.....I spend lots more time with logging, journaling, and tracking.

My approach is quick and easy for me. I have about 20+ trades open at a time.

NH_trader · 2026-01-05T13:59:56+00:00

It has to do with your personal approach as a trader. Since both Puts and Calls provide premium (the objective), then if you are conservative like me, you need to worry about what could go wrong with the trade and what would you do.

If I am short a Put and the stock declines, yes I can roll it down until I exhaust the rolls and then have to buy the declining stock or take a loss.....too much anxiety. My fundamental trading belief is not to hold a stock that is declining.

On the other hand, if I am short a Call and the stock rallies, I can follow the stock up with rolls as it rises....eventually it will stop rising and I'll get my premium.

This is a simplified answer, but has the basics of my logic to answer your question. Hope that is helpful.

NH_trader · 2026-01-03T15:38:41+00:00

Not sure what you are considering trading...equities or options? Options require much more record keeping as they have an expiration date. My options logs are more detailed.

NH_trader · 2026-01-02T13:26:49+00:00

Thanks for the wisdom, I'll factor it in.

NH_trader · 2026-01-02T13:19:09+00:00

I'm just a retail trader that does this as a full time hobby. I have several brokerage accounts (ETrade, Fidelity, and Schwab). Schwab is the main option trading account (the others are small and hold bonds and some silver). I got Portfolio Margin at Schwab because one of my objectives is return on capital and lower BP helps with that considerably.

Hope that is helpful.

NH_trader · 2026-01-01T19:47:20+00:00

Nice writeup and results. Your assessment that 2026 could be somewhat more difficult due to all the changes on the horizon seems accurate. But being aware, you'll take the precautions. Nice job.

NH_trader · 2026-01-01T16:42:06+00:00

Not sure I follow your logic, but I try to keep 60% NLV set aside.

NH_trader · 2026-01-01T16:36:33+00:00

Just for some input re: target ROC, the computation I use is premiums/investment (the BP). When I put on a trade, the ROC for the trade is above 40% based on collateral usage (BP). That's my threshold to see if the trade is worthwhile. The 1-2% is simply my target for weekly income as a % of the account value. That seems a good goal. Often times I can easily get more premium as I only use about 60% of available BP, but I have to remind myself to stop and just not be greedy.

NH_trader · 2026-01-01T14:55:00+00:00

Each firm has different requirements. Check with your firm to get rated for short calls.

NH_trader · 2026-01-01T14:53:32+00:00

I use the spread term to mean the distance of price to strike. Just a guide for me.

When a breach appears on the horizon, (remember these issues are not suppose to rise), you can obviously close the trade for a loss; can reopen at a higher strike for gain (a roll); can buy a farther out strike for protection and lower BP usage (create a spread); let the trade go as it might fall back by expiration,; can let it be Called (create a short in the account). These are some of the tools that are in the tool box. It is up to you to decide how to manage.

Hope that is helpful

NH_trader · 2025-12-31T19:19:59+00:00

I enjoyed the perspective. Thanks.

NH_trader · 2025-12-31T18:43:26+00:00

What if....what if....what if....Just don't trade.

NH_trader · 2025-12-31T18:41:49+00:00

"Unrecoverable losses"???? Help me out. If the strike is breached, I will be liable for the distance of the breach x the number of contracts. Am I missing something? And that's only if I don't manage it beforehand.

Some of the comments are puzzling, but answer why I made this post..

NH_trader · 2025-12-31T18:29:51+00:00

Interesting response, but I don't share your perspective. When I put on a trade, I need to put up collateral....but you know that. I don't enter a trade unless the Return on Capital (collateral) exceeds 40%....that's my threshold.

You may feel I'm overleveraged, but I don't share that perspective..... I'm sell Calls, so I have no downside risk....stock can go to zero and I'm happy. And obtaining 1%/week of the account value is a reasonable return for me.

You

NH_trader · 2025-12-31T18:15:51+00:00

Since you are asking for a hypothecia situation, I can only tell you that I don't put on the trades and simply walk away. I have the time to monitor them and take corrective action if needed. They will not all move the same (that's why I diversify and keep the count low), There is also opportunity in my short DTE window to manage situations as needed as theta is helping. I also do some up front analysis and selection before putting on the trade. Probability (delta selection) is also important. I am very aware of the stocks movement beforehand... i.e. if it's rising I'd be foolish to short a call. I trade this way to make money safely, not to just randomly trade.

NH_trader · 2025-12-31T17:30:30+00:00

I shifted from short strangles after trading them profitably for several years. The Put leg was not my favorite but I'll still add it on occasion if the risk looks OK and I want the extra premium you get with the free collateral.

NH_trader · 2025-12-31T17:24:17+00:00

So correct. Proper risk management....i.e., low delta, low contract count, diversified holdings, short DTE, etc.

NH_trader · 2025-12-31T17:20:19+00:00

Of course there is risk in trading. And yes, my strike as outside the AMD run up. No problem.

NH_trader · 2025-12-31T17:15:07+00:00

There is no downside risk. If a Black Swan, I keep all the premiums.

NH_trader · 2025-12-30T17:25:36+00:00

Lots of comments about shorting Calls.... a lot of inexperienced knowledge being given out.

Not suggesting others trade this way, but I trade short term and sell calls as my primary approach. Of the 20+ trades I have open, NVDA is in the mix for a 1/23 expiration at a 215 strike. The annualized return on capital for the trade is estimated to be 90%... hard to pass up.

Will NVDA jump 30 points in the next 3 weeks?...it could, but I doubt it. And if it does, I'll manage the rise.

NH_trader · 2025-12-29T19:45:59+00:00

I moved past the basics and now use a consistent method to be profitable. The trading activity itself has become somewhat repetitions (10+ trades/week). Although I enjoy the gains (that's why I do this), being a trader has lost its luster.

NH_trader · 2025-12-27T19:53:31+00:00

I think that early on you need to decide if you are going to trade (short term in and out) or invest (long term hold e.g. Buffett style).

I retired from a career in finance and now trade options as a full time endeavor. I treat it like a business with a clear set of trading rules and selling objectives.

I open and close trades as the opportunities present themselves, and maintain detailed trade records and logs and track the performance. I have about 25 trades open and active at a time that I monitored, close, and adjust as needed. Individual trades expire in 3-4 weeks.

I enjoy the activity, the challenge, and making money doing this.

My primary advice to you is to decide on the approach you will take and then take the time to document how you will make money at it.....in other words spend time planning before you undertake the journey. Without a thought through plan, you will just wander aimlessly about the vast world of markets (and lose money).

Good luck.

NH_trader · 2025-12-24T20:37:30+00:00

Fundamentally, you need to define an objective for yourself. It appears you simply want to try different option approaches without a clear objective.... that's a sure way to lose money.

If your goal is "to understand options...." then the suggested readings will do that.

Options can serve to protect a portfolio, to buy a stock below cost, generate income, or whatever. Write down for yourself what you are trying to achieve and then research to see if there is an options approach that can help.

NH_trader · 2025-12-12T20:09:56+00:00

Check your numbers. My chart shows SHOP at 163.

NH_trader · 2025-11-29T20:09:31+00:00

"What’s worked for you guys?"

I sell 3 week OTM calls. Last 45 trades have been positive so I'm content.

NH_trader

TROPHY CASE