This can also be done on SPY.

Trade Entry

• Start trade by Sell 12 Delta Put
  • This simulates buying the underlying and selling an ATM call
• Go around 10% lower (50 points lower on /ES) for the second NP Strike
  • This is usually around 8 Delta
• Aim for 18-30 DTE

Trade Management

• No profit target
• Let Puts expire
• Optionally, close Puts early if they area 75-90% in a few days

Assignment:

• Take assignment and wheel until taken away
• Take assignment on one or both of the NPs
• If assigned on the higher strike, then well a new ATM weekly covered call against it and also a new NP (20-30 Delta) to make it a covered Strangle
  • Depends on your BP allocation how many total contracts you can take
  • i.e. The number of times you can do a Covered Strangle for assignment
• If assigned on both and enough BP to take on more contracts, then Sell a new weekly ATM Covered Call against it and also a new NP to make it a covered Strangle
  • If not enough BP, then write a weekly ATM Covered Call of the average of the two strikes until called away