it's not ludicrous
you're not going to believe this, but i rly
the strategy mentioned by the article (yes, i read the entire thing)
i spent the better part of the last 4(?) years trying this and that going around in circles, and came to a conclusion that the Wheel (see page 1) using
DITM CC is the best that works for me - i nowadays sleep better and i no longer have to check the market every few minutes or so
i don't even need 4 monitors anymore so that i can "see" everything about the market and stock movement
just glancing on one TradingView chart at the iPad while on the kitchen is all i need
why? because the article is bang-on correct: with DITM CC, i can guess the direction wrong and still make money; all i need at setup is vanna + gamma + OI (in that order) and off i go
the downside is that
- you make little money; if you are greedy or if you need a large fixed income, this strategy is not for you
- this works for TSLA but the prems are too low (think CENTS) for reasonable R/R; SMCI (at 800) -c770 gives $1070 weekly income PER CONTRACT; who doesn't want 72% annualized ROC (in a perfect world)? If you use LEAPS instead of buying stock, you can even triple the ROC
of course, the biggest risk of CC (whether OTM or ATM or ITM or DITM) is stock suddenly drops but i have the perfect tested solution for that: Stock Repair Strategy - this works if you manage the drop early and you are not too far OTM yet
at the very extreme worst-case scenario, wait until the stock recovers before selling again; the only way you lose capital on DITM CC is if stock goes to 0 (Elon went all-in out of control)
another thing i learned over the years (and especially nowadays) is: take profits when you see them, there is ALWAYS a round 2 opportunity coming. The round 2 doesn't have to be the same CC strategy again, next time it can be Straddle or Strangle or IC or CSP, etc
