226: Does Adding a "Trend Filter" Improve Directional Option Selling Strategies?

"The trend is your friend." It’s a popular saying amongst traders, and we hear it all the time. But is there validity in the statement? We backtested directional option selling strategies with a long-term trend filter to see if there is a significant impact on performance. We used Option Alpha's backtester to review the data for SPY, GLD, and TLT short put spreads and short call spreads. Short put spread tests included a filter to only enter trades above the 200-day moving average. Short call spread variants included a filter to only enter trades below the 200-day moving average. Click here to see the full backtest results . Important Note : This podcast is for educational purposes only. Past performance does not guarantee future results. This data is presented objectively and is not financial advice or a suggestion to use these strategies. We encourage you to always do your due diligence and test your strategies. Let's take a closer look at the performance of these strategies using different trend filters. This is a great baseline when considering how to set up your trades, and we hope this inspires you to backtest your ideas for strategy optimization.

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226: Does Adding a "Trend Filter" Improve Directional Option Selling Strategies? is an episode from The Option Alpha Podcast by Kirk Du Plessis.

This episode is 50:30 long.

This episode was published on Apr 12, 2023.

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