This is what #1 strangle selling fund in the SPX does religiously 6 times per week

Oct 20, 2022

If you're trading SPX and selling short term options for income, you should absolutely know this order flow.

It seems like everyone has a different approach to theta harvesting and many people suffer through months or years of trial and error before settling on something that works.

Why not piggyback the work of the deepest pocketed, most successful institutional funds instead?

There's a large fund in the SPX that's been around for over a decade, and they've managed to survive everything from Volmageddon to COVID. The secret to their success? Selling strangles.

Now, this isn't just any old strangle selling strategy - this fund does it religiously six times per week, twice a day on Mondays, Wednesdays, and Fridays. And they've got it down to a science.

First, they only sell strangles expiring in 7dte, 14dte, and 28dte timeframes. Every trading day involves selling the 7dte (one week out) strangle, and either the 14dte or 28dte strangle as well.

Another key to their returns? They sell *slightly* more Puts than Calls. This allows them to capitalize on positive skew premium, while also holding a long market bias.

While I'm sure they have teams of quants and petabytes of data on backtests, they ultimately succeed with a very simple strategy. They don't close or roll their strangles. They are rarely out of market (they were on the sidelines briefly during the COVID crash - don't ask me how they knew).

So if you want to skip the legwork and start out with a winner, take a page from this fund's playbook. Start selling strangles, target short term 20 delta options and work on managing your bet size/bankroll. Consistency is key.

Some trade examples below:

On 11/11/22...
Opens short 12/9/22 3760 / 4150 Strangle 997x Puts & 982x Calls @$52.75
Expires worth $0.00

On 11/14/22...
Opens short 11/28/22 3880 / 4100 Strangle 979x Puts & 970x Calls @$38.45
Expires worth $0.00

On 11/14/22...
Opens short 11/21/22 3890 / 4080 Strangle 976x Puts & 971x Calls @$25.60
Expires worth $0.00

On 12/12/22...
Opens short 12/19/22 3810 / 4075 Strangle 978x Puts & 950x Calls @$35.60 be determined...

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