Trading Strategy - Double down wheel

So, this strategy is kind of like dollar cost averaging, only more degenerate.

Say you sold 150 puts on something and it knifes to 140. Rolling this trade kind of sucks since there’s no premium anymore, so what do you do? Instead of rolling to the same strike and quantity, bump that strike down and sell 2 (or 3) contracts for every 1 original one. If by expiry it knifes again, lever the fuck up and repeat! Sooner or later the underlying will bounce and all the puts will expire worthless.

This works best with small starting positions in real profit generating companies that have some kind of bottom. Don’t do this shit on something like AMC or some junky SPAC (or any ARKK stock) that can actually go bankrupt!

I’ve done variants of this many many times, and though it does lead to some stunning losses, for the most part things do not move in 1 direction forever and it works out the majority of the time.

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