Trading Strategies for Sideways/Choppy Markets — Full Research

Comprehensive research on 4 strategies for range-bound markets:

1. COVERED CALLS (Henry primary interest)

• Best delta: 0.30 = ~10-15% annual yield
• Conservative: 0.20 delta = 6-8% annual yield
• Aggressive: 0.40-0.50 delta = 15-30%+ annual
• Weekly vs monthly: ~1% diff; monthly preferred
• Best stocks: AAPL, MSFT, AMD, SPY/QQQ, TSLA (high IV but volatile)
• DTE sweet spot: 21-30 DTE
• Close at 50% of premium
• Roll when delta > 0.60 or within 7-10 DTE
• Only roll for net credit
• VIX sweet spot: 16-25
• Real returns in sideways: 1.5-2.5%/month = 18-30% annualized

2. IRON CONDORS

• Standard: 45 DTE, 10-16 delta short strikes
• Take profit at 50% of max credit
• Stop loss at 2x credit
• Time exit at 21 DTE
• Backtested 86% win rate with proper management
• 0DTE condors: 82-91% win rate in 2025
• Best underlying: SPX, RUT (no earnings risk)

3. INTRADAY MEAN REVERSION (2m/5m)

• VWAP reversion: Fade price 0.8-1.0 ATR from VWAP
• Confirmation: RSI(5) < 30 longs / > 70 shorts
• Target: VWAP; Stop: 1 ATR beyond extreme
• Win rate: 55-65%
• Only trade when ADX(15m) < 22
• 2-Period RSI (Connors): RSI < 10 = buy; exit above 5 SMA

4. BOLLINGER BAND + RSI

• Params: BB(20, 2.0), RSI(14), ATR(14)
• Long: close < lower BB AND RSI < 30
• Short: close > upper BB AND RSI > 70
• Stop: 2x ATR; Target: middle band
• Win rate: 55-62%

REGIME DETECTION

• ADX < 20 = sideways (use range strategies)
• ADX > 25 = trending (avoid mean reversion)
• VIX 16-25 = sweet spot for premium selling

Full 846-line report: ~/clawd/research/sideways-market-strategies/report.md
20+ sources cited.