I’ve been a fan of selling short strangles for a while, usually in the 7-14 dte range and .20-.25 delta each leg. Usually things are pretty manageable, but the call side gets tested frequently.
It has me questioning everything and wondering if I would just be better selling 2x as many puts at the same delta and no calls. Then just wheeling shares that get assigned.
What is your opinion on the better strategy, sell puts and wheel vs short strangles?
Short Puts vs Short Strangles
byu/Revolutionary-Ad3116 inoptions
Posted by Revolutionary-Ad3116
4 Comments
I have also had this debate. Currently having success with short strangles.
Maybe try a Jade Lizard. It gives you protection in this market.
Depends on the stock imo. If IV is highly skewed to the put side then it’s worth selling 2x puts, skew is flat or to the call side then do strangles.
For leg mgmt you can roll up and out for the leg at risk, or delta hedge from the onset (active management can be difficult).
Two puts will require 2 X the BP.
The short side usually has a lower OTM if the deltas are equal.
I would increase the OTM.
The proceeds will decrease but the return would still be higher than 2 puts because 1 X BP is used.