Sell a call above the price when the chart has rolled over, and let falling prices and rising volatility do the work. That is the theory. We ran it.
[One sentence. The answer, stated plainly, before any explanation. If the honest answer is "it depends," the verdict is Conditional and the condition is named here — not left to the reader to find.]
The bear call spread is the mirror image, and it is what people sell when a chart has rolled over. You sell a call above the current price and buy a further one above it. If the stock falls, goes sideways, or rises only slightly, you keep the credit.
The argument for it is that falling markets pay you twice: the direction is on your side, and implied volatility usually rises as prices drop, which fattens the premium you collect. That is a real effect. What is less often said is that the same rising volatility is what makes the losing trades lose faster.
[What was held fixed, what was varied, and why those choices. Anything that would change the answer if chosen differently gets named here, not hidden.]
| Universe | — |
|---|---|
| Entry delta | — |
| Days to expiry | — |
| Exit rule | — |
| Assignment handling | — |
| Commissions & slippage | — |
| Period | — |
[The findings. Every number in this section comes out of the run — none are written by hand. If a figure cannot be traced to the run, it does not appear.]
A strategy can win most of the time and still lose money. What matters is expectancy — average profit per trade once the losses are counted at their real size. A high win rate with a negative expectancy means the wins are small, the losses are rare and large, and the account bleeds slowly enough that it feels like it's working.
Every verdict on this site is decided on expectancy. Win rate is reported because people ask for it, never because it decides anything.
[The rules were fixed on one part of the history and the verdict rests on a part the strategy had never seen. Both numbers go here, along with the distance between them. A verdict of Holds requires the out-of-sample result to stand on its own — a strong full-period figure is not enough on its own.]
| In-sample expectancy | — |
|---|---|
| Out-of-sample expectancy | — |
| Gap between them | — |
| Walk-forward windows | — |
| Variations tested | — |
[If there were too few trades to walk forward, this says so rather than leaving the row blank.]
[Most strategies are neither good nor bad — they are good under conditions and bad outside them. This section names the boundary: the delta, the regime, the tenor, or the rule that flips the verdict. If there isn't one, say so.]
[The honest limits. Survivorship, liquidity assumptions, fills that wouldn't have happened, regimes not covered by the sample, and anything else that would make a careful reader discount the result. Written before publication, not after someone complains.]
[The practical read. Not advice — the conclusion a person running this strategy should draw about their own version of it.]