Sell Put players, I've had some new thoughts lately. Using probabilistic thinking + discipline, strictly control risks, and improve win rates. Looking forward to everyone sharing their experiences~
First, three filtering systems.
- Valuation domain: Dynamic P/E ratio (PE) < industry average × 0.8, P/B ratio (PB) < historical 30th percentile.
- Quality domain: ROE > 15% for 3 consecutive years, free cash flow/revenue > 20%.
- Momentum domain: 50-day moving average > 200-day moving average, and RSI(14) ∈ [40,70].
Second, tail risk hedging.
For selected underlying assets, add protective Puts: buy Puts with a strike price = target strike price × 0.7, with premium cost ≤ 30% of the sold Put premium.
Thus, forming a "Sell Put + Deep Out-of-the-Money Put" spread strategy. Achieving 85% probability of small wins (premium) covering 15% probability of big losses (assignment).
Finally, don't be greedy for premium! Diversify positions! Keep enough cash!
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