How I Sell Strangles To Write My Own Paychecks

Are you ready to discover how selling strangles can become your ticket to consistent profits in the options market? Today, I want to share with you one of my favorite monthly income strategies: selling strangles. This strategy has been a key player in helping me generate consistent profits in the options market.

1. Understanding Skewed Strangles

Skewed strangles are my go-to strategy for neutral to uptrending markets. But what exactly are they? Picture this: you cover both sides of the market by simultaneously selling a put and a call option. The put is sold at a level you believe the stock won’t dip below, while the call is sold at a level you predict the stock won’t surpass. This setup allows you to profit as long as the market stays within a certain range — perfect for sideways or slowly uptrending markets.

2. Crafting the Perfect Selling Strangles

Now, let’s talk about how I structure my strangle trades for optimal results. I typically go for options with around 90 days until expiration to collect the most premium while avoiding excessive gamma risk. For the put side, I aim for a 10 Delta, while for the call side, I opt for a 5 Delta. Why the lower Delta for calls? Well, considering the market’s tendency to trend upwards, I give myself more room to adjust by placing the call further away.

3. Risk Management and Automation

Effective risk management is crucial when trading strangles. I stick to a 25% profit target and a 400% stop loss to lock in gains and cut losses early. Additionally, I ensure that no more than 10% of my account is at risk in any single trade. And for those of you looking to automate your strangle trades, I’ve got you covered. I’ve developed an auto trader that handles entry, exit, stop loss management, and even avoids market crashes — all in one convenient platform.

Strategy for Selling Strangles

So there you have it — my strategy for selling strangles and writing my own paychecks in the options market. By mastering skewed strangles, you can capitalize on various market conditions while keeping risk in check.

Remember to stick to your risk management rules, stay disciplined, and always be prepared to adapt to changing market conditions. With patience and practice, you too can harness the power of strangles to achieve your financial goals.

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Thanks for reading 🙂
Austin Bouley
CEO & Chief Strategy Officer