Losing EM skillset at low volume?

[cyanide12345678]

In the process of moving cities and figuring out what a future job looks like:

Talking to a very large university hospital for their community sites - not their big top tier EM academic site.

Since this hospital system has some 10+ hospital systems, I can vary up my practice setting.

Option A: Full time at a 7k-8k volume shop. Have a great relaxing job. Lose my skill set over time and slowly not remain comfortable with volume, and maybe even acuity. But probably will be able to sleep most nights during a 24 hour shift, feel very relaxed, and ironically make more money than their busy sites.

Option B: Work 5 24s at the low volume place, and mix it with their busy level 2 community shop and do 4 x 8 hour shifts, very high acuity, maintain skill set and comfort with volume and critical patients. Unfortunately take a 20k paycut compared to the other option. I'll also end up working more days because of the 8 hour shifts instead of the 24s or 12s.

So...do we really lose skillset if we're at a low volume place? Am I killing future job prospects being at a very slow place exclusively? I mean...it's very tempting to see 20 patients in 24 hours and make ~ 240/patient seen roughly.

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[Angry Birds]

Option A. And you can pick up some per diem shifts -- like 1 or 2 a month -- at a bigger hospital. Just ask to be credentialed at the bigger hospital and say you don't mind filling a couple holes in the schedule a month.

Then, enjoy your quiet nights in a rural ER.

 

[WilcoWorld]

In the process of moving cities and figuring out what a future job looks like:

Talking to a very large university hospital for their community sites - not their big top tier EM academic site.

Since this hospital system has some 10+ hospital systems, I can vary up my practice setting.

Option A: Full time at a 7k-8k volume shop. Have a great relaxing job. Lose my skill set over time and slowly not remain comfortable with volume, and maybe even acuity. But probably will be able to sleep most nights during a 24 hour shift, feel very relaxed, and ironically make more money than their busy sites.

Option B: Work 5 24s at the low volume place, and mix it with their busy level 2 community shop and do 4 x 8 hour shifts, very high acuity, maintain skill set and comfort with volume and critical patients. Unfortunately take a 20k paycut compared to the other option. I'll also end up working more days because of the 8 hour shifts instead of the 24s or 12s.

So...do we really lose skillset if we're at a low volume place? Am I killing future job prospects being at a very slow place exclusively? I mean...it's very tempting to see 20 patients in 24 hours and make ~ 240/patient seen roughly.

How long have you been out of residency? If you're 1-3 years out then atrophy is a real concern. If you're greater than 10 years out I think your skills will be pretty durable.

 

[turkeyjerky]

I think skill atrophy would definitely be a concern working exclusively at a low volume site like that. If that's what you want to do for the rest of your life, than it's fine, but if you think there's any chance that you'll want transition back to a real hospital in the future, I would go for #2. Frankly, I think skill atrophy is a real concern at anything sub-20k per year.

 

[CliveStaples]

When comparing jobs I like to compare apples to apples. I break it down per hour and take it from there. It sounds like per hour at the really low acuity spot is 200/hr which for a job where you'll get to sleep most nights and see less than a patient per hour isn't bad pay at all, imo. While skill atrophy is a concern, I do think there's a certain amount of wellness and longevity that comes from not working yourself hard every day at work.

If working 32 hours per month there over a year is a 20k pay cut, I'm estimating that the higher acuity site is paying you less than 150 dollars per hour. This is not good pay. I would rather work option A and then find an alternative way to keep your skills up. I'm not sure what locums is like in that region but even 1-2 shifts per month at a 30k/year facility or higher should be plenty to keep your skills up. I would not commit myself to working 32 hours a month at less than 150/hr unless it was the sleepiest of jobs, and you already have that for far better pay.

 

[Angry Birds]

When comparing jobs I like to compare apples to apples. I break it down per hour and take it from there. It sounds like per hour at the really low acuity spot is 200/hr which for a job where you'll get to sleep most nights and see less than a patient per hour isn't bad pay at all, imo. While skill atrophy is a concern, I do think there's a certain amount of wellness and longevity that comes from not working yourself hard every day at work.

If working 32 hours per month there over a year is a 20k pay cut, I'm estimating that the higher acuity site is paying you less than 150 dollars per hour. This is not good pay. I would rather work option A and then find an alternative way to keep your skills up. I'm not sure what locums is like in that region but even 1-2 shifts per month at a 30k/year facility or higher should be plenty to keep your skills up. I would not commit myself to working 32 hours a month at less than 150/hr unless it was the sleepiest of jobs, and you already have that for far better pay.

Wellness is the key.
But yeah, I don't find the risk of atrophy is as much if you are a few years out of residency and work a couple of shifts at a bigger hospital per month. And those 1-2 shifts per month will be a constant reminder to you how much regular EM sucks and how great you have it at the rural ER, thereby increasing your overall state of mind and well-being.

Just try it for a year and see how you feel. I'm betting you will count your stars and laugh at the fact that you even considered Option B.

 

[bravotwozero]

Wellness is the key.
But yeah, I don't find the risk of atrophy is as much if you are a few years out of residency and work a couple of shifts at a bigger hospital per month. And those 1-2 shifts per month will be a constant reminder to you how much regular EM sucks and how great you have it at the rural ER, thereby increasing your overall state of mind and well-being.

Just try it for a year and see how you feel. I'm betting you will count your stars and laugh at the fact that you even considered Option B.

100% this. After crashing and burning at a hospital ED with a malignant administration, I have ventured out into FSED territory. Pay is lower, but much less stressful, ZERO EMS traffic, no c suite to deal with. I would care about skill atrophy if I still saw this field as a career and not simply a paycheck. Now, it's whatever gets me to my retirement target faster.

 

[RoyBasch]

I think most skills ossify pretty well at about 5 years post residency. That being said, keeping your ER edge razor sharp will always be perishable skill; however, I think after 5 years you can get back in the saddle pretty quick between practice environments.

I would probably not hit the brakes this early in your career unless you are pretty certain you will never go back to practice at a high volume/acuity shop in the future.

 

[RoyBasch]

100% this. After crashing and burning at a hospital ED with a malignant administration, I have ventured out into FSED territory. Pay is lower, but much less stressful, ZERO EMS traffic, no c suite to deal with. I would care about skill atrophy if I still saw this field as a career and not simply a paycheck. Now, it's whatever gets me to my retirement target faster.

I do a pretty extensive mix of practice environments (tertiary care/academic, county, community, FSED, and critical access). I do not always find FSED to be the least stressful because when really emergencies walk in there (not infrequently) you have very few resources to deal with them.

 

[bravotwozero]

I do a pretty extensive mix of practice environments (tertiary care/academic, county, community, FSED, and critical access). I do not always find FSED to be the least stressful because when really emergencies walk in there (not infrequently) you have very few resources to deal with them.

This would be true if you are working in some rural FSED somewhere in BFE, unlike houston, the medical epicenter of this country, where a tertiary care center is but a quick phone call and short ambulance ride away.

 

[cyanide12345678]

How long have you been out of residency? If you're 1-3 years out then atrophy is a real concern. If you're greater than 10 years out I think your skills will be pretty durable.

It will be 2 years and a handful of months when i switch

 

[cyanide12345678]

When comparing jobs I like to compare apples to apples. I break it down per hour and take it from there. It sounds like per hour at the really low acuity spot is 200/hr which for a job where you'll get to sleep most nights and see less than a patient per hour isn't bad pay at all, imo. While skill atrophy is a concern, I do think there's a certain amount of wellness and longevity that comes from not working yourself hard every day at work.

If working 32 hours per month there over a year is a 20k pay cut, I'm estimating that the higher acuity site is paying you less than 150 dollars per hour. This is not good pay. I would rather work option A and then find an alternative way to keep your skills up. I'm not sure what locums is like in that region but even 1-2 shifts per month at a 30k/year facility or higher should be plenty to keep your skills up. I would not commit myself to working 32 hours a month at less than 150/hr unless it was the sleepiest of jobs, and you already have that for far better pay.

Slow shops pays $372k plus benefits for 1872 annual hours. 12 x 13 shifts with possibility of doing 24s.

Busier places pay 290k for 1536 annual hours. 8 x 16 shifts. Plus benefi

Option B was a 75:25 split. The hourly for the rural place is slightly better. But the $/patient seen is ridiculously different since at one place you average 0.8 pph and at the other place you average 1.7 pph with a 30 percent admission rate.

Having said that, 1.7 pph with scribes isn't really that bad either. But since i currently make 265/hr IC, the rural shop is a 10 percent paycut for a 40-50 percent drop in volume after accounting for benefits. The other shop is a 20-25 percent paycut for the same volume.

Everything about option A sounds much better on paper, except i will slowly lose skills.

 

[cyanide12345678]

I think most skills ossify pretty well at about 5 years post residency. That being said, keeping your ER edge razor sharp will always be perishable skill; however, I think after 5 years you can get back in the saddle pretty quick between practice environments.

I would probably not hit the brakes this early in your career unless you are pretty certain you will never go back to practice at a high volume/acuity shop in the future.

The "normal" EM environment is honestly just burning me out. I don't even think i would ever want to go back to a busy shop. Not by choice, at least.

I slowly see myself phasing out of medicine completely. I've also polished my skills for trading options, and have been beating the sp500 very easily with extremely conservative plays. Attached is a comparison of my portfolio in the last 3 months vs Sp500 when i started doing heavy option trading.

I also recently liquidated my Etf holdings in my taxable account to go all out on selling put options. Having run scenarios of massive bear markets and still being more or less profitable, i will probably be generating significant income from my taxable portfolio selling options. So my need to work should hopefully decrease even more.

 

[CliveStaples]

Everything you've told me suggests that option A is the job for you. Run, don't walk to it.

The only alternative I might suggest is if you're working much more than 120 hours per month at your current job. Cutting back might be the answer. You'd make similar to working more hours at this new, slower job which is the only downside I see to it (156 hours per month minimum is a lot).

 

[turkeyjerky]

Nuts that the low volume site actually pays more per hour, is it out in the boonies or something? It must be since they’re having the main shop subsidize it. If so, I would factor the commute into the equation (more than 30 min drive on top of a 12 hr shift makes for a long-ass day). 1.7 pph really isn’t bad at all, stupid that they do 8’s.

Money isn’t everything, and they might “adjust” the pay at any time. Do some soul-searching and if you really want to get out of clinical EM then full-time at the small shop is the right move.

 

[cyanide12345678]

Nuts that the low volume site actually pays more per hour, is it out in the boonies or something? It must be since they’re having the main shop subsidize it. If so, I would factor the commute into the equation (more than 30 min drive on top of a 12 hr shift makes for a long-ass day). 1.7 pph really isn’t bad at all, stupid that they do 8’s.

Money isn’t everything, and they might “adjust” the pay at any time. Do some soul-searching and if you really want to get out of clinical EM then full-time at the small shop is the right move.

40 minute commute from my targeted school district for the 60k volume community site. I could stay closer, but crap school districts in vicinity.

1 hour commute to remote site.

In the grand scheme, less time commuting if 6-7 days of commute vs more number of commute days.

 

[WilcoWorld]

It will be 2 years and a handful of months when i switch

In that case you're right to be giving this the consideration that you clearly are.

 

[TheComebacKid]

I'm still very early in my career. Take what I say with a huge grain of salt.

I get EM is not conducive to wellness, and sick patients are great when you are young but 20 years out it wears on you. That being said, I personally didn't go into EM to see urgent care patients. They can pay as me as much as they want, let me sleep at night, etc. but it doesn't bring me any satisfaction. If it did I would've become an NP or went into family medicine. What I'm saying now may not be how I feel in 20 years. But I can only make a decision based on what I want to do with my career now.

It's not even so much the skill atrophy that I would worry about, but it's about the fact that my job would be boring. The academic ER I work in now has an urgent care section that is only staffed by attendings. I worked there yesterday, and I honestly remember thinking to myself that I would rather just go home and not even get paid. You've had neck pain for 3 years? I don't care, go home. The ease of it all actually made me more unhappy than taking care of a challenging and sick patient.

I think one of the most important aspects of overall wellness is not just about hours, nights, volume of patients... (those are all important by the way). But it's about diversity of practice. The ability to mix things up and see lower acuity in the low volume shop at the same time getting to keep your skills sharp and get the satisfaction of taking care of higher acuity is a healthy balance. You are still young and not that far out of residency. You can tolerate a little harder lifestyle at the expense of getting to see sicker patients and diversifying your work experience. Academic physicians, IMO, have relatively decent job satisfaction (despite less pay) because they don't just see patients, they do other stuff too.

For me, option B would be what I would go with. I know I'm in the minority, and you are getting a lot of great advice on here, but if you can tolerate the financial hit, and the ability to work more/harder, it may be a fairly rewarding and better balanced experience.

 

[TheComebacKid]

The "normal" EM environment is honestly just burning me out. I don't even think i would ever want to go back to a busy shop. Not by choice, at least.

I slowly see myself phasing out of medicine completely. I've also polished my skills for trading options, and have been beating the sp500 very easily with extremely conservative plays. Attached is a comparison of my portfolio in the last 3 months vs Sp500 when i started doing heavy option trading.

I also recently liquidated my Etf holdings in my taxable account to go all out on selling put options. Having run scenarios of massive bear markets and still being more or less profitable, i will probably be generating significant income from my taxable portfolio selling options. So my need to work should hopefully decrease even more.

Sorry. I just read this post of yours.

Go with option A. No questions. Option A. Ignore my previous post.

 

[Mr Bitterness]

I spent my first ten years in high acuity, procedure-heavy places. Then went to an admin role in a super low acuity hospital that was very close to two level one trauma centers. Codes, traumas, OB patients etc all went to the other ED’s. Spent five years there and my skills atrophied very quickly. I was very good at managing STD’s and ”Missed dialysis” patients lol. Went back to a high acuity ED and it took quite a while for me to be comfortable with procedures and sick patients.

FWIW, I’d pick option A and try to occasionally pick up shifts at the high acuity sites. They’ll always come up.

 

[oldtown]

I'm still very early in my career. Take what I say with a huge grain of salt.

I get EM is not conducive to wellness, and sick patients are great when you are young but 20 years out it wears on you. That being said, I personally didn't go into EM to see urgent care patients. They can pay as me as much as they want, let me sleep at night, etc. but it doesn't bring me any satisfaction. If it did I would've become an NP or went into family medicine. What I'm saying now may not be how I feel in 20 years. But I can only make a decision based on what I want to do with my career now.

It's not even so much the skill atrophy that I would worry about, but it's about the fact that my job would be boring. The academic ER I work in now has an urgent care section that is only staffed by attendings. I worked there yesterday, and I honestly remember thinking to myself that I would rather just go home and not even get paid. You've had neck pain for 3 years? I don't care, go home. The ease of it all actually made me more unhappy than taking care of a challenging and sick patient.

I think one of the most important aspects of overall wellness is not just about hours, nights, volume of patients... (those are all important by the way). But it's about diversity of practice. The ability to mix things up and see lower acuity in the low volume shop at the same time getting to keep your skills sharp and get the satisfaction of taking care of higher acuity is a healthy balance. You are still young and not that far out of residency. You can tolerate a little harder lifestyle at the expense of getting to see sicker patients and diversifying your work experience. Academic physicians, IMO, have relatively decent job satisfaction (despite less pay) because they don't just see patients, they do other stuff too.

For me, option B would be what I would go with. I know I'm in the minority, and you are getting a lot of great advice on here, but if you can tolerate the financial hit, and the ability to work more/harder, it may be a fairly rewarding and better balanced experience.

Give it some time. It all becomes routine. I once thought the same way as you. Now, my perfect shift would be 15 kidney stone patients between the ages of 20 and 50.

 

[gruemd]

The "normal" EM environment is honestly just burning me out. I don't even think i would ever want to go back to a busy shop. Not by choice, at least.

I slowly see myself phasing out of medicine completely. I've also polished my skills for trading options, and have been beating the sp500 very easily with extremely conservative plays. Attached is a comparison of my portfolio in the last 3 months vs Sp500 when i started doing heavy option trading.

I also recently liquidated my Etf holdings in my taxable account to go all out on selling put options. Having run scenarios of massive bear markets and still being more or less profitable, i will probably be generating significant income from my taxable portfolio selling options. So my need to work should hopefully decrease even more.

A fellow premium seller! This is the way.

 

[cyanide12345678]

100% this. After crashing and burning at a hospital ED with a malignant administration, I have ventured out into FSED territory. Pay is lower, but much less stressful, ZERO EMS traffic, no c suite to deal with. I would care about skill atrophy if I still saw this field as a career and not simply a paycheck. Now, it's whatever gets me to my retirement target faster.

Basically how i feel. It's unfortunate, but that's how it is. I'm really good at what i do now that i have some attending experience with a lot of **** show shifts and being in a single coverage ER.

But it gets old walking in to an ER full of patients with multiple people in the waiting room and you just run around like a mad man jumping from room to room. Seeing 5 plus patients right off the bat when i walk in at 7 pm gets old really fast.

 

[cyanide12345678]

A fellow premium seller! This is the way.

Yes. Graduated from Spy to now selling naked puts on SPX. Targeting an annual 30-40 cash on cash annual return using naked puts. Even selling puts with a strike price that is 20% below current price and 3 month duration with margin allows for a return of 35-40 percent cash on cash without using margin, so no interest payments. Even with those parameters, there's a 99.96 percent probability of the option ending worthless, and if it goes in the money, you just roll it over for another few months and keep rolling until it does.

 

[Fox800]

Yes. Graduated from Spy to now selling naked puts on SPX. Targeting an annual 30-40 cash on cash annual return using naked puts. Even selling puts with a strike price that is 20% below current price and 3 month duration with margin allows for a return of 35-40 percent cash on cash without using margin, so no interest payments. Even with those parameters, there's a 99.96 percent of the option ending worthless, and if it goes in the money, you just roll it over for another few months and keep rolling until it does.

Can you recommend some good books to get started?

 

[cyanide12345678]

Can you recommend some good books to get started?

Start with one of my own forum posts on here that talks about options. Then YouTube videos. That's how I've done it. I personally still haven't read any options books, I've read a lot of investing books that had me go with a lazy automated 3 fund portfolio.

@thegenius has probably done more reading on the topic than i have and does riskier and more interesting trades than me.

My latest formula is very simple, I've made it basically algorithmic:

I sell 3-6 month out spx naked put that is 20 percent below current price. Currently a 6 month put like that is giving an 8.9 percent cash on cash yield because it's a naked put with a margin account (but margin isn't used unless option expires in the money).

If option expires worthless, great, that's lots of $$$ in the bank (my last trade was $12560 for a 6 month put). If price declines 15 percent, so not the full 20 percent, i just roll over the option, meaning buy back the original one i had, and sell another one with a lower strike and further out, essentially giving time for the market to recover, and basically significantly decreasing probability of loss and still making money by increasing the time from 6 months to longer out. An etf called putw was recently started that follows a put selling strategy, it had similar sp500 returns with lower volatility, and increased alpha (higher return for less risk). Selling puts is essentially the only way to increase returns without increased risk. There's 2-3 really good seeking alpha articles with amazing graphs from someone who truly understands the strategy of increasing returns with selling puts. Options can easily decrease volatility, increase returns, and limit risk. They are amazing.

 

[coachB]

Yes. Graduated from Spy to now selling naked puts on SPX. Targeting an annual 30-40 cash on cash annual return using naked puts. Even selling puts with a strike price that is 20% below current price and 3 month duration with margin allows for a return of 35-40 percent cash on cash without using margin, so no interest payments. Even with those parameters, there's a 99.96 percent probability of the option ending worthless, and if it goes in the money, you just roll it over for another few months and keep rolling until it does.

How did you do in March 2020?

 

[skougess]

How did you do in March 2020?

Yeaaaaah...these strategies work great until they don’t. Then they fail spectacularly.

 

[gruemd]

Yes. Graduated from Spy to now selling naked puts on SPX. Targeting an annual 30-40 cash on cash annual return using naked puts. Even selling puts with a strike price that is 20% below current price and 3 month duration with margin allows for a return of 35-40 percent cash on cash without using margin, so no interest payments. Even with those parameters, there's a 99.96 percent probability of the option ending worthless, and if it goes in the money, you just roll it over for another few months and keep rolling until it does.

Nice. Once my taxable account is a bit bigger I plan on just that. That far til expiration my TW account needs close to 50k for just that one trade....ties up a bit too much for me. As for now more just doing cash secured puts and covered calls, some earnings plays, etc.

And downturns is exactly why you size positions appropriately so that if you have to roll down and out you can. Those who got clapped in March are those who were over leveraged and therefore couldn't size into their positions. As soon as the downturn reverses those positions quickly become profitable. I know many who made absolute bank selling puts during March because of exactly this. People look down on options because of those with poor strategy implementation/risk management.

 

[gruemd]

Can you recommend some good books to get started?

Agree with youtube. Optionalpha, project option, and most of all, tastytrade. Look up a Playlist called Mike and his whiteboard through tastytrade, That's a great place to start as the visual aids really help. For a really broad overview if you're totally new to options, this video also walks through all the basics really well. Long, but worth it and can be sped up pretty easily. Funny enough, this is the brother of Mike above.

 

[cyanide12345678]

Yeaaaaah...these strategies work great until they don’t. Then they fail spectacularly.

Probably would have done better, but i wasn't doing options at the time.

Options decrease downside risk since the premium covers a part of your loss, so mathematically they are better than just owning a stock.

You should theoretically always do better if you hold the strike. If you just sell extrinsic value, aka time, then time ONLY moves in one direction and is predictable.

Selling Puts: The Good, The Bad And The Ugly

What accounts for put-write strategies' under-performance. How to fix put-write underperformance.

seekingalpha.com

 

[cyanide12345678]

Nice. Once my taxable account is a bit bigger I plan on just that. That far til expiration my TW account needs close to 50k for just that one trade....ties up a bit too much for me. As for now more just doing cash secured puts and covered calls, some earnings plays, etc.

And downturns is exactly why you size positions appropriately so that if you have to roll down and out you can. Those who got clapped in March are those who were over leveraged and therefore couldn't size into their positions. As soon as the downturn reverses those positions quickly become profitable. I know many who made absolute bank selling puts during March because of exactly this. People look down on options because of those with poor strategy implementation/risk management.

Yeah my last trade used $82500 dollars 😂 $12560 premium over 6 months. I had made so many smaller profits on SPY, jets, mj etfs that i was like screw it, time to go bigger. Plus the 60:40 tax treatment, the European style options, meant it was time to play in the big leagues

 

[WilcoWorld]

I spent my first ten years in high acuity, procedure-heavy places. Then went to an admin role in a super low acuity hospital that was very close to two level one trauma centers. Codes, traumas, OB patients etc all went to the other ED’s. Spent five years there and my skills atrophied very quickly. I was very good at managing STD’s and ”Missed dialysis” patients lol. Went back to a high acuity ED and it took quite a while for me to be comfortable with procedures and sick patients.

FWIW, I’d pick option A and try to occasionally pick up shifts at the high acuity sites. They’ll always come up.

Side question re: your name - Are you a Soul Coughing fan?

 

[gruemd]

Yeah my last trade used $82500 dollars 😂 $12560 premium over 6 months. I had made so many smaller profits on SPY, jets, mj etfs that i was like screw it, time to go bigger. Plus the 60:40 tax treatment, the European style options, meant it was time to play in the big leagues

Yeah I've only dabbled in 0-3 DTE SPX trades, but some have served me well. Have you evaluated if shorter time in trades would be beneficial? Like 30-60 DTE for the larger theta decay? You'd of course lose some of the extrinsic value from time but I think the increase in theta would make it worthwhile

 

[cyanide12345678]

Yeah I've only dabbled in 0-3 DTE SPX trades, but some have served me well. Have you evaluated if shorter time in trades would be beneficial? Like 30-60 DTE for the larger theta decay? You'd of course lose some of the extrinsic value from time but I think the increase in theta would make it worthwhile

Toying with the idea of 1 month options right now, similar 20 percent decline in 1-2 month and roll over if in the money. Running some numbers gives around 22-26 percent annual return cash on cash with naked puts. I think it will take time to fine tune exact expiration dates and how far out of money i want my trades.

 

[WilcoWorld]

Can I get a better ROI with options trading if I went to a powerhouse residency?

J/k - 80% of the last dozen posts were unintelligible to me.

 

[thegenius]

Yes. Graduated from Spy to now selling naked puts on SPX. Targeting an annual 30-40 cash on cash annual return using naked puts. Even selling puts with a strike price that is 20% below current price and 3 month duration with margin allows for a return of 35-40 percent cash on cash without using margin, so no interest payments. Even with those parameters, there's a 99.96 percent probability of the option ending worthless, and if it goes in the money, you just roll it over for another few months and keep rolling until it does.

Good times...using margin does make things a lot easier in trading. It's much easier to get the 40-60% yearly returns. I was just looking at the 3/19/21 ^SPX 2930.00 Put which is about 20% below today's price. The current premium is about 76, which is 2.6% return over three months (76/2930). Not sure how that can be stretched to 30-40% but with margin I suppose it's possible. Hope things are going well for ya. I'm doing fine, but I'm hurting now with TSLA, I did some trades right before it was announced they were going to be included into the S&P 500 when it went just made nuts again. And that stock continues to go just mad nuts up and up and up. It's really unbelievable. Other than that I still manage to win ~90% of my trades (making anywhere from $50 - $150/trade), and of course I have some losers but anyone who does anything in the stock market will have losers.

 

[thegenius]

Yeaaaaah...these strategies work great until they don’t. Then they fail spectacularly.

No...not really.

What would you say if someone bought an index ETF in Jan 2020 and then you looked at the value of their account in April 2020? That strategy apparently failed as they lost 25% of their investment.

No one can predict black swan events, but the single biggest advantage options have is using less money to make more money. It is often (although not always) less risky.

A classic example. You sell a option spread. You will either win $180, or lose $320. The key thing here to note is it's not a coinflip. Poker is flipping a coin, going to the casino is flipping a coin, but with options you are always in control of the situation. The right way to manage this option spread is to close your position once you've made 50-75% of the value to guard yourself against a "black swan event" (where the market or the stock wildly moves quickly in one direction or another).

This is why lots of my trades are winners for $50-$150 as I want to limit risk. Selling puts which is what cyanide does is probably the safest and most reliable way to make money in a neutral to bull market and studies have shown that it beats buy and hold. It's one of the few option strategies that does beat buy and hold.

 

[thegenius]

Yeah I've only dabbled in 0-3 DTE SPX trades, but some have served me well. Have you evaluated if shorter time in trades would be beneficial? Like 30-60 DTE for the larger theta decay? You'd of course lose some of the extrinsic value from time but I think the increase in theta would make it worthwhile

That's probably what I would look into. There ain't much decay from months 6 -> 2. But cyanide's trades are basically set to gain money in all cases unless there is a major black swan event.

 

[cyanide12345678]

That's probably what I would look into. There ain't much decay from months 6 -> 2. But cyanide's trades are basically set to gain money in all cases unless there is a major black swan event.

The reason i make mine so conservative is because of a ridiculous amount of leverage that my account has.

For example:

I sold 3 spx puts on 12/10/20. See attached.

The put was for jun 18 2020 expiration, strike price $2750 for SPX, 25% decline. Premium was $4180 per put.

For 3 such cash covered puts i would have required $275000 per put sold.

3 x $275000 = $825000. And received a premium of $4180 x 3 = $12540. That's a $12540/$825000 a 1.52 percent return.

For naked puts in a margin account, i required 10% of that money.

So, i used $82500 of my money (10% of 825000), and received $12540 in premium, and effectively received a 15.2 percent return on my cash. No cost of margin since the money isn't used. That's 15 percent in 6 months. So do the math for annual return if you rinse and repeat.

Now what happens if in 3 months there is a black swan event - March 2020 for example.

My rule is, if price falls 20 percent, so $2950 roughly, then etrade gives me an alert. Then i simply open my account, click "roll over". "Buy back" the same jun 2020 option for strike $2750, close my position, and pay someone a premium, tax loss harvest that loss, and in the same trade "roll over" and sell an option and push the date another 6 months or 1 year lets say dec 2021. This roll over premium will be higher than the premium i have to pay because of the longer duration. So effectively, when market declines 20 percent, i just take a smaller net profit, have the next premium pay for closing my position and make an extra profit on top and extend the duration to give time for recovery. So effectively the sp500 buy and hold investor lost 20 percent, while my portfolio still went up. Then i keep pushing the date of expiration forward, until i "win" and keep making $$$ on extrinsic value since time is a directional variable - it only moves in one direction. With out of the money puts, I'm selling time, and time only runs out, if not today, then in a few months or years. If market declines 60-70 percent, im probably still looking at minimum loses and continued positive premiums.

Also spx options cannot settle before the expiration as they are european style, they settle in cash, which is better, and 60 percent of my premium counts as long term capital gain on spx rather than 100% short term on spy. Spx is big league essentially.

 

[BoardingDoc]

I like money as much as anyone, but maybe this conversation belongs in the pre-existing thread on options trading? We don't need two of them.

 

[JacobMcCandles]

Surefire 30-40% returns per year? There's a reason that those on Wall Street can't do this. Sounds like the doc lounge with all the 70 year old docs who can't retire. Best of luck, nonetheless.

 

[BoardingDoc]

Surefire 30-40% returns per year? There's a reason that those on Wall Street can't do this. Sounds like the doc lounge with all the 70 year old docs who can't retire. Best of luck, nonetheless.

Nah man, don't listen to those haters! It's foolproof! Even if you get a purple duck event, you can just leverage some more puts on margin to narrow down the theta. Boom. 20% more return right there, guaranteed. It's literally impossible to lose money and everyone on wall street who does this for a living just don't know about it!

 

[thegenius]

Nah man, don't listen to those haters! It's foolproof! Even if you get a purple duck event, you can just leverage some more puts on margin to narrow down the theta. Boom. 20% more return right there, guaranteed. It's literally impossible to lose money and everyone on wall street who does this for a living just don't know about it!

LMAO

 

[gruemd]

Nah man, don't listen to those haters! It's foolproof! Even if you get a purple duck event, you can just leverage some more puts on margin to narrow down the theta. Boom. 20% more return right there, guaranteed. It's literally impossible to lose money and everyone on wall street who does this for a living just don't know about it!

Pretty sure nobody called it foolproof. But sure, nobody ever beats the S&P, literally impossible to do....

Happy to move this over to the options thread.

 

[thegenius]

The reason i make mine so conservative is because of a ridiculous amount of leverage that my account has.

For example:

I sold 3 spx puts on 12/10/20. See attached.

The put was for jun 18 2020 expiration, strike price $2750 for SPX, 25% decline. Premium was $4180 per put.

For 3 such cash covered puts i would have required $275000 per put sold.

3 x $275000 = $825000. And received a premium of $4180 x 3 = $12540. That's a $12540/$825000 a 1.52 percent return.

For naked puts in a margin account, i required 10% of that money.

So, i used $82500 of my money (10% of 825000), and received $12540 in premium, and effectively received a 15.2 percent return on my cash. No cost of margin since the money isn't used. That's 15 percent in 6 months. So do the math for annual return if you rinse and repeat.

Now what happens if in 3 months there is a black swan event - March 2020 for example.

My rule is, if price falls 20 percent, so $2950 roughly, then etrade gives me an alert. Then i simply open my account, click "roll over". "Buy back" the same jun 2020 option for strike $2750, close my position, and pay someone a premium, tax loss harvest that loss, and in the same trade "roll over" and sell an option and push the date another 6 months or 1 year lets say dec 2021. This roll over premium will be higher than the premium i have to pay because of the longer duration. So effectively, when market declines 20 percent, i just take a smaller net profit, have the next premium pay for closing my position and make an extra profit on top and extend the duration to give time for recovery. So effectively the sp500 buy and hold investor lost 20 percent, while my portfolio still went up. Then i keep pushing the date of expiration forward, until i "win" and keep making $$$ on extrinsic value since time is a directional variable - it only moves in one direction. With out of the money puts, I'm selling time, and time only runs out, if not today, then in a few months or years. If market declines 60-70 percent, im probably still looking at minimum loses and continued positive premiums.

Also spx options cannot settle before the expiration as they are european style, they settle in cash, which is better, and 60 percent of my premium counts as long term capital gain on spx rather than 100% short term on spy. Spx is big league essentially.

Yea man I hear ya. I've become quite knowledgeable of rolling. "If you continue to roll you will never lose." LOL. if you got 10x leverage with margin that's sweet. What platform are you on? eTrade? And do you have or use something called Portfolio Margin?

 

[JacobMcCandles]

Even with those parameters, there's a 99.96 percent probability of the option ending worthless, and if it goes in the money, you just roll it over for another few months and keep rolling until it does.

Other than that I still manage to win ~90% of my trades (making anywhere from $50 - $150/trade), and of course I have some losers but anyone who does anything in the stock market will have losers.

Pretty sure nobody called it foolproof. But sure, nobody ever beats the S&P, literally impossible to do....

There's a few numbers thrown out in the above that makes it seem fool proof. It's not common for the professionals, let alone amateurs, to beat the S&P 500 over the long run...just look at the data.

 

[skougess]

No...not really.

What would you say if someone bought an index ETF in Jan 2020 and then you looked at the value of their account in April 2020? That strategy apparently failed as they lost 25% of their investment.

No one can predict black swan events, but the single biggest advantage options have is using less money to make more money. It is often (although not always) less risky.

A classic example. You sell a option spread. You will either win $180, or lose $320. The key thing here to note is it's not a coinflip. Poker is flipping a coin, going to the casino is flipping a coin, but with options you are always in control of the situation. The right way to manage this option spread is to close your position once you've made 50-75% of the value to guard yourself against a "black swan event" (where the market or the stock wildly moves quickly in one direction or another).

This is why lots of my trades are winners for $50-$150 as I want to limit risk. Selling puts which is what cyanide does is probably the safest and most reliable way to make money in a neutral to bull market and studies have shown that it beats buy and hold. It's one of the few option strategies that does beat buy and hold.

Options are zero sum. At the end of the day it’s literally gambling. They were a financial instrument created for hedging and if you are not doing that then you are fooling yourself into thinking you aren’t gambling. You can go to the sports book in vegas and find 10:1 winners all day too.

Owning shares is a fundamentally different concept as wealth is literally created while you are holding the shares (unless you are purely speculating).

Can you lose money in both? Of course. But they are not really comparable.

 

[cyanide12345678]

Anyway.... Moving on. Thank you guys for the fairly unanimous vote on picking option 1 and your opinions on the real question at hand.

Thank you.

 

[GoBuckeyes913]

This would be true if you are working in some rural FSED somewhere in BFE, unlike houston, the medical epicenter of this country, where a tertiary care center is but a quick phone call and short ambulance ride away.

Actually, this is dependent on the FSED. If you’ve seen one FSED........you’ve seen one FSED.

In the past 10+ years I have often found that an ambulance ride is not a hip, skip, or jump away to our tertiary care center that is 15 min away (where I also work). When a true emergency rolls in— you’re it, often working with less resources. (I.e. we don’t carry blood products at our FSED). We also take EMS traffic. I’ve done every procedure sans a perimortem section, burr holes, and thoracotomy at our FSEDs.
My unsolicited opinion to the OP:
Find out what your FSED can and cannot do. Next, write a list of what you can and cannot tolerate. Thinking low volume is low acuity is short-sighted. Talk to the docs who work there. Then you can draw your own conclusion.