Traditional finance would say that there is definitely a problem with over trading.
Tastytrade, however, has a different approach to this argument.
- With commissions as low as they are today ($1 round trip per leg), over trading has become a thing of the past.
- strategic liquidity is available in many more underlyings today than ever before.
- Bid-ask differentials are tighter today than historical averages.
- Price discovery has been automated with competition.
- By staying small and trading often, we can realize a much more stable win rate over the long run.
Since the selling premium has historically been profitable, the worst thing we can do is not trade often and not take advantage of scale.