Long Options Strategy That [Apparently] Works and a Sizing Strategy that Takes One Strategy to Production-Ready

This week we look at two contributions from members. The first is a LONG options strategy–something we don’t talk about a lot–that is hinting at an opportunity in the “tail reward” category.

The second is a sizing technique that has taken one strategy to ready-to-run status for an incubator account! This sizing technique may be applicable to other strategies. Feel free to test it and share your findings with the group.

Long options rules from Garrett:

  • Long .04 Delta option in the direction of momentum/trend
  • 100 DTE chain
  • Fifty-period Donchian Channel (DC) break defines a new trend
  • One contract
  • $1,000 profit target/roll
  • Upon taking profit, open next trade per rules until new DC touch

This strategy was tested on long Puts only in /CL. I sense there is either an opportunity for the long Calls also. Next steps, if you choose to accept the challenge, are to test long Calls and begin trying other Deltas, DTEs, etc.

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