In contract trading, most retail investors tend to be buyers, chasing one-sided upward or downward trends, but often suffer heavy losses when the market reverses. In contrast, those traders who can achieve long-term profits often favor selling strategies, calmly responding to market fluctuations with the characteristic of 'anti-fragility.' Wang Lu has stood out in the options market by adopting a predominantly selling strategy, winning awards in national futures trading competitions. The core of this selling mindset is not to oppose market trends but to earn certain returns from time value and volatility reversion.
The advantage of the seller's strategy lies in its ability to effectively cope with market uncertainties. As an options seller, there is no need to precisely predict the price trends of the underlying asset; as long as it is judged that volatility will revert to the mean, profits can be earned by selling options for time value. Wang Lu's core trading logic revolves around timing based on volatility. When volatility is at a relatively high level on the monthly and weekly candlestick charts, the efficiency of sellers earning time value is higher. This strategy perfectly avoids the risk of buyers 'betting on direction'; even in a sideways market, profits can be realized through the decay of time value.
To build a seller's profit system, three key dimensions must be grasped. In terms of product selection, it is essential to prioritize options with high volatility, low positions, and strong trends. The Wenhua Index should be used to judge the overall trend, combined with the macro cycle to confirm that the product is at the bottom, while selecting high-volatility products above the long-term average of the VIX index. In terms of contract selection, 'last day' contracts that are close to expiration (10-15 days) are preferred; these contracts have a fast decay rate of time value and higher safety margins. A tiered strategy can be employed for position building, similar to Wang Lu's approach, where the maximum position is taken at the first tier during a one-sided upward trend, the second tier is next, and the third tier is the least, optimizing capital efficiency through dynamic position adjustment.
The seller's strategy is not static and needs to be flexibly switched according to market conditions. In the face of a volatile market or when unable to monitor, a double selling strategy can be adopted, simultaneously selling both call and put options to earn dual time value; when the market is in a clear upward trend, switch to a single selling strategy, focusing on profiting from selling put contracts. When volatility is low and the market has rapid catalysts, a brief switch to a buyer's strategy can also be made to capture trending opportunities. This flexible strategy switching allows the seller's system to have both stability and profit elasticity.
Risk control is also the core of the seller's strategy. Wang Lu locks in risks through a threefold mechanism of 'position limits + dynamic hedging + emergency stop-loss'. When the underlying asset continues to rise after the purchase with no signs of pullback, futures long positions are used for hedging; when funds are relatively abundant, a third of the position can be hedged first to avoid completely hedging and missing the rebound opportunity. For retail investors, the key to the seller's strategy is to abandon the 'greed for huge profits' mindset, accepting stable small profits and accumulating wealth through long-term compound interest. In the contract market, the principle of 'slow is fast' also applies. The anti-fragility of the seller's strategy is a solid guarantee for long-term profits.
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