Dan Sheridan – Short Strangles for Monthly Income

Original website: https://www.sheridanriskmanagement.com/course/short-strangles-dans-way

Content: full course

In this course Dan teaches you how to trade Short Strangles for Monthly Income with a special guest appearance from Karen Bruton in the final class.

This was a three week live class that met twice a week for three weeks.

Key Learning Outcomes

• Master the Short Strangle Strategy: Learn how to effectively execute the short strangle strategy to profit from market stagnation or limited price movements.
• Risk Management Techniques: Understand how to limit downside risk and protect profits while trading short strangles.
• Maximizing Monthly Income: Focus on generating monthly returns using conservative option selling strategies.
• Managing Low Volatility Markets: Adapt the short strangle approach to different market environments, particularly low volatility periods.
• Practical Trade Adjustments: Learn how to adjust positions in response to market changes to protect capital and optimize profits.

Course Structure

1. Introduction to Short Strangles
   • Overview of options basics: calls and puts
   • Defining short strangles and their risk/reward profile
   • When to use short strangles for income generation
   • Key characteristics of markets suitable for short strangles
2. Executing the Strategy
   • Step-by-step process for setting up short strangles
   • Understanding the role of implied volatility (IV) in short strangles
   • Selecting the right strike prices and expiration dates
   • Choosing underlying assets with minimal price movement
3. Managing Risk and Adjusting Positions
   • How to set and manage stop-loss levels
   • Managing positions when the market moves against you
   • Adjustment techniques to minimize losses, including rolling positions and converting trades
   • Diversifying short strangles across multiple assets to reduce risk
4. Generating Consistent Monthly Income
   • Leveraging theta decay for predictable returns
   • Timing short strangles for optimal income generation
   • Managing premium collection to build steady monthly income
   • Understanding the role of time decay and volatility in generating profits
5. Real-World Application and Examples
   • Case studies of short strangles in live market scenarios
   • Practical examples of trade setup and management
   • Live trading sessions with Dan Sheridan to see strategy execution in real time
6. Risk Management and Capital Preservation
   • How to maintain a strong risk-to-reward ratio
   • Position sizing and capital allocation for short strangles
   • Monitoring market conditions to adapt your approach as necessary
   • Implementing defensive strategies when market conditions change