So I have been doing a bunch of research over the past 3 to 4 months and trading some paper accounts. I also have an investment account holding long-term blue chips and ETFs, along with a Roth IRA and a Roth 401k setup through work.
My goal is not to quit my job and do it full time. I just want to add a little spice to my income and collect some monthly profit where I can. Additionally, I just find it very fun and interesting.
Having said all that, I traded real money last week on some 5 ish DTE broken wing butterfly options. I went 4/4 which I know is a dangerous place to be cause it won't always be the case. I shifted the body of the option (the 2 short put/calls) really far OTM in order to reduce the RR and give me a higher probability of hitting.
I want to keep trading these here and there but my main source I want to be LEAPS/ZEBRA/PMCC setups on stocks like QQQ, SPY, IWM, etc. How realistic is this setup for making small amounts of weekly money? I also can't seem to understand why someone would pick a LEAP call for this over a ZEBRA? I feel like it's a no brainer in the fact that the ZEBRA is a higher delta which nets higher income if the stock climbs, allowing you to sell the CCs closer to the trading price for a higher credit/premium. I may be missing something which Is why I am here.
Thank you to anyone who has some input to give. I'm 31 years old and own a house with a family so not looking for a get rich quick scheme….just want to maybe retire a touch earlier than 65 if I'm lucky.
Advice for a Steady Cash Flow Strategy?
byu/UnusDeicide inoptions
Posted by UnusDeicide
2 Comments
consistent income through options is appealing, but there is a catch. most of the “income per week” systems are actually writing tail risks; works great till it fails. compared to other strategies such as PMCC or LEAPS, which have less risk but are directional, meaning that any chop or retracement of QQQ will stop your income flow and leave you with an open losing position. ZEBRA and LEAP are similar, but the key difference lies in capital utilization and simplicity. The ZEBRA strategy provides a higher delta value while being more sensitive and less forgiving in terms of drawdowns.
for consistent income streams, it is advisable to trade small positions, long durations, and low yields.
Every market has a strategy that suits it