13 months of selling weekly far-OTM puts — $16.7k realized on a $52k account. Tear my strategy apart.
Quick background: I've been trading options for about 7 years — day traded them, swing traded, bought puts for hedging, basically tried the whole playbook at some point. About 13 months ago I landed on selling puts and haven't looked back. It's the only thing I've done that just consistently works week after week, so that's what this post is about. I want real feedback before I scale this thing up.
How I run it:
Weeklies only. I open positions Monday or Tuesday and let them expire that Friday. Strikes are 15-20%+ OTM, deltas under 30 (usually way under), I never sell on earnings weeks for that ticker. I keep a watchlist set up per sector so I'm forced to spread out instead of piling into whatever's hot — right now I'm usually holding 20-26 positions a week, mostly 1-5 contracts each, across miners, biotech, fintech, metals, travel, tech, etc.
I run it on margin at Schwab, currently around 3.5x notional vs my net liq (had it closer to 5x at one point and decided that was dumb). Roughly 165-185k. If I get assigned, I don't panic — I hold the shares and sell them Monday morning and restart. I end up in the money very little of the time.
This week's tickers for flavor: HUT, BTDR, CIFR, CORZ, IREN, RIOT, WULF, MRNA, HIMS, SLS, UPST, SOFI, PYPL, NCLH, DKNG, CMG, KGC, HL, CLF, IONQ, INTC, SMCI. Collected $502 of premium (I can break down further if asked). I lean toward high-IV small and mid caps because the premium per dollar of margin beats large caps at the same delta by a mile.
The actual results (13 months):
- 232 option trades closed: 228 wins, 4 losses. 98.3% win rate
- ~$12.6k realized from options
- Total lifetime losses on the puts: about $225. Worst single put loss ever: -$14.57
- Assigned twice (both HUT), sold the shares for +$1,077 and +$2,712 — funny enough my two biggest wins ever came from the assignments, not the puts themselves
- All-in realized including those stock exits: ~$16.7k
- Account sits around $52k now
- Current pace is about $400/week realized, best week ~$650, and yes I've had a red week (-$147)
- I reset the 15-20% OTM every week so theoretically a stock can keep declining less than that threshold and Ill survive (I've lived through this with $HUT).
Stuff I already know is a problem, so save yourself the typing:
- HUT is ~42% of my lifetime P/L and crypto miners are still ~37% of my current notional. I'm diversified by ticker count but honestly a chunk of it is one big BTC bet. I use to solely sell NCLH and HUT early on. Still working on continuous diversification (already made significant improvements though).
- Deep OTM weeklies on small caps have garbage bid/ask spreads, and the marks that prints can get ugly. Fills degrade as I size up too.
- Everything is short-term gains so taxes take a real bite.
- My whole 13 months has been in a market that never truly broke. I'm fully aware a 98% win rate is just what sub-30 delta selling looks like until the bad week shows up. That's the part I'm trying to prepare for (diversified across at least 3-5 sectors and 1-4 tickers each sector).
What I'd love input on:
- Anyone who ran leveraged short puts through 2020 or 2022 — what actually saved you or killed you? What rule do you wish you'd had going in?
- Better ways to deal with the wide-spread/illiquid mark problem on deep OTM weeklies, other than just avoiding thin strikes? Would shifting part of this to put spreads or XSP/SPX kill too much premium?
- Where does this stop scaling? I'm already seeing worse fills on the small caps as contract counts grow.
- Anyone gone from Reg T to portfolio margin running something similar — worth it? Did it change your sizing?
- General roast welcome. Rather hear it from you guys than learn it the hard way.
Not financial advice obviously. Happy to share more detail on anything.