Theta Harvester

Yes, theta harvesting can generate regular income from options decay. However, it's not guaranteed income - losses will occur. Think of it as a strategy with positive expected value over many trades, not a fixed income stream.

Both collect theta, but iron condor has protective wings making max loss defined. Short strangle has unlimited risk if the stock moves big. Iron condor requires less margin and is suitable for most traders. Short strangle is for experienced traders comfortable with undefined risk.

Depends on structure. Iron condors on Singapore stocks might require S$500-1,000 max risk per contract. Cash-secured puts require the full purchase price in cash. Start with defined-risk strategies and at least S$10,000-20,000 for proper diversification.

If the stock moves beyond your breakeven points, you'll lose money. For iron condors, the loss is capped at (width - credit). For undefined risk strategies, losses can be large. That's why management (closing, rolling) and position sizing are crucial.

No - close at 50% profit or 21 DTE, whichever comes first. Holding to expiration increases gamma risk and assignment risk. The last few dollars of profit aren't worth the added risk.

16 delta (1 SD) gives ~65-75% probability of full profit with less premium. 30 delta gives higher premium but lower probability (~50-60%). Use 16 delta for conservative approach; 30 delta if comfortable with more adjustments. Match to your risk tolerance.

Roll if: thesis intact, can collect credit for roll, have management bandwidth. Close if: thesis broken, no credit available, loss exceeds tolerance, or just want to simplify. Don't roll just to avoid taking a loss - sometimes closing is the right choice.

Depends on account size and time for management. Generally 3-6 positions is manageable for part-time traders. Professional traders may have dozens. Each position requires monitoring. Don't over-extend your management capacity.

Stamp duty (0.2%) applies if you're assigned on short puts or buy stock for covered calls. This reduces effective premium by the duty amount. For cash-secured puts on DBS at S$33, stamp duty would be ~S$66 if assigned. Factor this into strategy selection.

Yes, but adjust structure. Instead of iron condor (neutral), use put credit spread (bullish). You'll collect theta while also benefiting if the stock rises. Or use cash-secured puts if you want to potentially own the stock.

Consider: (1) Max loss per position as % of portfolio (2-5%), (2) Total theta strategy allocation (20-30%), (3) Greek limits (max aggregate delta, vega), (4) Correlation between positions. Use Kelly criterion for optimal sizing, but typically use half-Kelly for safety.

High win rate doesn't guarantee profitability. If you win 80% for S$100 but lose 20% for S$500, expectancy is negative. You need: (Win rate × Avg win) > (Loss rate × Avg loss). Manage losses carefully - cutting losers at 2× credit helps maintain positive expectancy.

All short premium positions tend to lose together in market stress (correlations spike to 1). Mitigations: (1) Diversify across sectors, (2) Limit total short vega, (3) Hold some tail hedges, (4) Size so portfolio survives simultaneous adverse moves, (5) Have cash reserves.

IV Rank 40-70% is often optimal. Below 40%: premium may not compensate for risk. Above 70%: premium is great but may crush rapidly or indicate upcoming event. The sweet spot collects decent premium with room for IV to fall (bonus vega profit).

Daily: Record P&L. Calculate theoretical theta P&L (position theta × days). Calculate gamma P&L from stock move (0.5 × gamma × move²). Calculate vega P&L (vega × IV change). Residual is noise/model error. Over time, this reveals what's driving returns.