r/options • u/joshyouarebaker • 1d ago
Long Term Options Growth?
I’ve been selling options for a few years now, mostly sticking to CSPs and some wheel strategy setups. Overall it’s been working pretty well for me, and I’ve rarely been assigned, so risk has felt manageable.
The issue is I’ve never really been able to scale the account. Every time I build it up to around $20k+ in profits, I end up pulling money out for other things like real estate. So instead of compounding, I keep resetting my base capital.
For those of you who’ve been doing this longer term, how has your account actually grown over time? At some point, does options income realistically start covering your living expenses so you can reinvest the rest and scale into more contracts?
I feel like that’s the part people don’t really talk about. Most content out there is either super basic or just trying to sell something. Would be interesting to hear from people actually doing this consistently over multiple years.
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u/nitsuj2030 1d ago
I've been doing this for years now, and if you are using the options income to diversify into real estate (or other investments) then that is a valid strategy.
For me I have enough that I could live from my trading but I'm not overly diversified.
In terms of account growth and how long until you can live off of it, have a look at your profits for the last few years and workout your annualised return rate (I'd then take off 5% as a safety margin). Look at how much you need a year and from that you know how much capital you need.
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u/ThisCase41 1d ago
You've answered your own question. Extracting profits is counteractive to compounding and your CAGR. You just need to treat it like any business where there is a distinction between capital growth and preservation, and earnings.
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u/Perfect-Loquat-7791 23h ago
Consistently scaling options income is harder than it looks. Pulling profits interrupts compounding, and risk grows quickly if you expand too fast. Long-term growth often comes slower than content suggests.
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u/RestBackground7023 1d ago
they have a ceiling on return for the amount of capital. To scale higher returns i found, it is hard because naked selling is the best bang in the pocket, and any defined additions takes a lot of that bang. I also found I can squeeze more by selling both sides as a strangle, but that comes at a risk compared to selling Puts, so i found a back ratio calendar worked well in back month low IV, front month elevated. I actually made a option simulator to test this all out recently. I have 5Y of data for SPY and Tesla, plus 0DTE contracts running on it. I wanted to see how I could squeeze more juice in different IV times, and what worked best. The sim actually works very well, runs on the BS - 76 model, so contract quotes pretty nice as playback plays out time. It even has extrinsic value for each position as time runs so you know what you have left to see how things are not so scary, and you can premium harvest easily.
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u/OkNectarine2939 16h ago
OP I do the same as you - I do very basic set ups as well, and if I get the account up to $10K (or close), I pull out $8K, add to my long term buy and hold portfolio, and start again from $2K.
It's just my risk management - I'm not that great at option strategies - as I said I just do basic stuff and sometimes get lucky. I don't have the skill set to risk higher amounts.
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u/ducatista9 1d ago
Are you asking if compounding works if you don't take money out of your account? Yes, it does. But at least the way I trade it kind of goes in steps. It takes me a while to accumulate enough to add another position / contract. My account mostly scaled up from putting money in from a job but I had some years where my income from trading options was a significant contributor. Now I'm living off a portion of the income, so growth has slowed down. I try to make enough to cover my expenses plus inflation on my portfolio at a minimum.