Put
Why selling OTM spreads is guaranteed to wipe out your profitsTrading without a risk management is gambling. Gambling relies on hope.
Selling OTM spreads depends on a 75% success rate and surviving a few big losses. The RR is very low if you are aiming to collect 25% of the spread. I traded 12 months solely on BullPut and this has taught me well. It's a losing strategy based on the misconception of high win rate and "consistent" income.
Using ITM spreads, you can enjoy higher RR and live to make another trade. I took a calculated loss on AAPL with RR 1.6.
PUT USD/CAD Expiration NYork (13:30) Expiración España (19:30)PUT USD/CAD Expiration NYork (13:30) Expiración España (19:30)
QQQ June BullPut 135/137 (ROI +57%)Entry when price rebounded at Support. Sold at $0.78
Planned RR = 1.6
By moving up the SL with the uptrend, profits were protected, hence risk became 0
Exit - Bought 0.08
Gain $0.70
ROC =16% per month
