Why selling OTM spreads is guaranteed to wipe out your profits

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Trading without a risk management is gambling. Gambling relies on hope.

Selling OTM spreads depends on a 75% success rate and surviving a few big losses. The RR is very low if you are aiming to collect 25% of the spread. I traded 12 months solely on BullPut and this has taught me well. It's a losing strategy based on the misconception of high win rate and "consistent" income.

Using ITM spreads, you can enjoy higher RR and live to make another trade. I took a calculated loss on AAPL with RR 1.6.
Jun 09
Trade closed: stop reached:
Jun 10
Trade closed: stop reached: Assuming OTM Bull Put at 145/150 (above)


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