Today, I met up with my trader friend (JL) who has given me some pointers about writing ER2 options. He emerged unscathed where everyone else crash & burn in Aug & still make a tidy sum to go on a short holiday + pay for for golf lessons. He quite aptly sum up the options writing strategy to essentially:
a) Dealing with Probablity
b) Risk Management (position sizing)
On hindsight, whilst I have gotten the probability aspect covered, I did not do too well with the risk management part. You can bet I will be tweaking my strategy with his good advise.
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