If you or someone you know spends a decent amount of time on option trading forums, I’m sure you have heard of theta gang. You’re obviously reading this post because you want to know what theta gang is.
I’ll start off by telling you what it is not:
No, it’s not an actual gang. No, it’s not an exclusive trading club made up of elite traders.
Now that we have that out of the way, let’s discuss what theta gang is.
What Is Theta Gang?
Traders who use option selling strategies identify as being part of theta gang. They are traders that profit off of theta. That’s really all there is to it, they are option sellers.
How The Phrase Originated
“Theta gang” became a poplar phrase among users of Reddit. The phrase surfaced when traders realized that there was more to options than simply outright buying them.
Options trading communities on Reddit, such as r/wallstreetbets, spend most of their time gambling. They buy contracts outright and hope for the best. Many of the trades executed by members of that community have less than a 20% chance of being profitable. That’s why the forum is mainly filled with what they call “loss p*rn”.
Surprisingly, there came a time when a few traders discovered that they could sell options and increase the odds of success significantly. Although, it wasn’t the increased odds of success that created theta gang….
It was the psychological satisfaction of knowing that they were selling an option with low odds of success to someone else. They took it as an opportunity to troll and flex their superiority.
“Taking someone else’s money” was satisfying to them.
The Birth Of Theta Gang Communities
Other traders were turned on by this. They decided that they should also sell options. Thus, theta gang was born. Members of theta gang felt powerful, as if they discovered fire.
Word spread quickly about theta strategies. Shortly after, many theta gang forums, communities, and chat rooms were created. In fact, there is even a website!
Want to know my answer to “what is theta gang”? I’d call it a group of people who finally discovered that the stock market is not a casino. They realized that you actually need some sort of edge to be successful.
So what are these magical theta gang strategies that they use?
Theta Gang Strategies
Let me repeat myself- theta gang strategies are not new strategies. They are strategies that have been around for decades. Theta gang strategies are just option selling strategies.
When you sell an option, your profit is the entire premium of the contract you sold. For example, if you sell an option contract that is trading for 3.45, your profit at expiration is $345. You receive profits as theta decay runs its course. Theta decay is the loss of extrinsic value as an option approaches expiration. Therefore, once expiration hits, an option loses all of its value and you receive 100% of the profit.
You see how theta strategies work? Instead of racing against the clock, the clock works for you. You won’t dread expiration, you will look forward to it!
Although theta gang strategies require you to sell options, some strategies require a combination long and short options. There are many reasons why you would combine a long option with short options, but that is beyond the scope of this post. For more information, check out my Ultimate Guide For Theta Strategies.
Anyway, the important thing for you to know is this: theta gang strategies require you to sell options.
Here is a list of the most popular theta gang strategies:
- Covered Calls
- Naked Calls
- Cash Secured Puts
- Naked Puts
- The Wheel
- Vertical Debit Spreads
- Vertical Credit Spreads
- Iron Condors
- Butterflies
- Short Strangles
Theta Strategies Are Less Risky
Listen, theta strategies carry low risk if they are executed properly. In fact, if you really know what you’re doing, there are many scenarios where you can completely escape a loss! Yup! You can still be right, even when you’re completely wrong!
That’s the real magic of these strategies. No matter how wrong you are, you always have time on your side. You get paid by theta decay no matter what direction the trade goes.
You can even get paid to add more time value to your position if you need more time for your trade theory to play out. Adding time value or moving around strike prices is known as making adjustments to a trade.
Tell me, what other trading strategies let you make adjustments to your losing trades so that you can end up winning?
Learning Curve
I know, it looks like there are a lot of different theta gang strategies that you need to learn. I’m not going to lie to you- there is a ton you need to learn to implement these strategies properly.
You’re going to need to dedicate a lot of time to researching and practicing. You will feel like you’re learning to trade all over again. In the end, it will be worth it. Learning these strategies inside and out have the potential to take your trading to the next level.
The learning curve is steep, but you can speed up the process by researching and interacting with experienced theta traders.
The best and fastest way to learn these strategies is to join a forum or a chat room. Once you’re in, you have direct access to other people who use these strategies.
Theta Gang Discord?
Now that we have answered the question of “what is theta gang”, I’m sure you’re curious how you can quickly join and become a member. The best way to do it is by talking to others.
Discord servers are the best places to go to learn from others. It’s easier to have more direct conversations with experienced traders on Discord. Also, it’s unlikely that you will be trolled for asking questions. Try asking a “noob” question on an online forum like Reddit…. You’ll be shredded to pieces!
Unfortunately, if you search the internet for theta gang Discord servers, there aren’t many results. Most theta gang Discord servers are hidden from the public. It’s okay though, I have you covered!
The Wall Street Prodigy Discord has an entire category dedicated to theta gang strategies. Come join my Discord server and we can begin discussing theta gang strategies right now! What are you waiting for?
Did you like this post? What theta gang strategies do you use? Where have you heard of theta gang? Make sure to let me know!
