No. of Recommendations: 5
It appears you tend to sell longer term puts vs. shorter term puts. Correct, or is there a method you use to switch between short/long term? For discussion sake, let's call short vs. long term as 3 months.

It depends : )

Generally, that's my preference. Though my average is much less than a year, probably 6-9 months.
The safest ones are longer dated, as it gives more time for valuation rather than random noise to dominate.
The premium itself is larger, giving more of a margin of error, and more return that can be made quickly (giving a good annual rate) if the stock price starts to rise.

But I also avoid writing any put where the annualized return on offer is less than 15%/year on the time value erosion alone.
When premiums get generally low, only shorter dated puts meet that hurdle. I do a few, but tend to back off writing puts at those times, or stop entirely.
It's a strategy that makes good returns when valuations are attractive and premiums are high, and does that even if the market doesn't rise much.
But if premiums are low, it's a good year to do something else with your money.

With that in mind, I find my long run return to be something like the midpoint between (say) 10-12%/year and whatever the stock returned in the same period.
Bad and flat and moderate years get better. Fantastic years become merely good to very good.
The outcome of any one contract is sometimes a bit of a toss-up, but I prefer to pick a few tickers I can value and write puts against it over and over for years.

Jim
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