Why not safely do Bull Put Spread forever

I am new to options and after losing some money I understand to stay in this game long term you have to implement strategies and hedge your bets. I am really curious why not just do bull put spread of deep OTM which there is certain surety that market wont fall that low and make 0.5-1% safely every week, since you are getting net credit it seems very safe to me. Let’s assume you make 0.75 every week that makes you 36% annually in any weather, can somebody tell me why is this a bad strategy?
PS- I understand one black swan even I will be wiped out of existence because of risk reward ratio.

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:slight_smile: How deep OTM?

nifty is trading at 15800, something like 15000?

Hi @Debjyoti_Biswas
Seems like your are gradually approaching towards Iron Condor :grinning:
As I recall, earlier you asked about Bear Call and here about Bull Put , so combine both and you get Iron Condor.
Personally, I have found “Profiting with Iron Condor Options” by Michael H. Benklifa very helpful.

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Indeed :slight_smile:

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Thank you :slightly_smiling_face: :pray:

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@Ravi18 Thank you for the suggestion I will surely give it a try. I wasn’t even sure where the strategy was taking me, I guess this is the fun of options right? You discover new things everyday.

Can you suggest me a good book for Options related mathematics?

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@Debjyoti_Biswas You are welcome.
Regarding books, I am not an expert but I am sharing what I did :
I studied works of Lawrence McMillan, Sheldon Natenberg and Dan Passarelli. Of course, a beginner should complete the Zerodha Varsity first. Specifically for options related mathematics, you may consider John C Hull or Michael Thomsett but you don’t really need to go deeper into mathematics to make money in option trading. Experience is the best teacher. You can’t hope to make money by just reading books.
Wish you luck :slightly_smiling_face: :+1:

@Ravi18 Thanks for the suggestions.

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Best to read it all in simplest form on the internet first- especially Varsity. You can also look at Tasty Trade’s Mike’s Whiteboard Videos on YT.

And then maybe
Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits - Dan Passarelli, William J. Brodsky

Most of these Trading books are on libgen.is :wink:

But remember - Liquidity and Free Market trumps all other factors.

Go with Covered call Strategy - Ever Green Strategy…

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Playing options in bull trends, that’s okay. It’s better to keep your risk level to the minimum just like you have mentioned.

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