Paper money trades with double deltas

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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.

How to play the markets?

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This past week has been incredibly volatile. I played the market drop with a put spread, but could have made much more. Losses by not winning is actually a bit worse of a feeling than actual losses suffered.

Anyhow, the markets seem to be calming down, and I’m looking for trades to open. This site is dedicated to non-directional options trades, but as a trader, you’re constantly looking for opportunities, and when it comes, you need to have an open mind.

Here are a few ideas for taking advantage of the settling market:

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