As you know, I am very conservative in selecting my short strangle trades, with respect to both the underlying instruments, as well as the risk. I look for deltas at or under 10%, to keep the probability of the strangles high.
The beauty of selling options via short strangles is that even if the market moves against you, you can still adjust your position as you see fit. You can adjust as much, or as little as you like.
I think it would be a very interesting test to see, how the short strangle strategy would work, if one accepts a higher level of risk. For this reason, from now on, I will be using Thinkorswim’s Paper Money platform, to test the exact strangles I create with real money, but at double the delta. The potential profit will be much higher, and with higher profit, you also have more room to adjust the trade as needed.
This will be a very interesting experiment, and I will make the results public along with my real trades.