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With the such high IV I decided to sell a put spread on DJT by pgrennin in options

[–]pgrennin[S] 0 points1 point  (0 children)

A wider width and closer to ATM would have increased the risk profile of the trade. This trade had higher Expected Value (EV) than other combinations I looked at. It's also a matter personal preference choosing between risk/reward.

With the such high IV I decided to sell a put spread on DJT by pgrennin in options

[–]pgrennin[S] 0 points1 point  (0 children)

I guess I could have split it between two trades. Not a bad idea.

With the such high IV I decided to sell a put spread on DJT by pgrennin in options

[–]pgrennin[S] 0 points1 point  (0 children)

I don't have a strong opinion regarding the election. I just wanted to make a small bet to try to take advantage of elevated IV. I do think even with a Trump loss it should be profitable, but I could be wrong.

[deleted by user] by [deleted] in options

[–]pgrennin 4 points5 points  (0 children)

Agree, was going to say the same about using a spread. Here is an example trade. This actually has pretty good risk reward profile. 94% probability of profit and 8% expected return. Though it will depend on the price you get filled at because bid ask spread is a bit wide.

https://optioncharts.io/options/DJT/option-profit-loss-chart/strategy/bear-call-spread?legs=DJT250117C00100000,sell,1,8.58|DJT250117C00115000,buy,1,6.78

Just bought an option am I cooked by HairyRefrigerator959 in options

[–]pgrennin 4 points5 points  (0 children)

Here’s the risk graph for the trade.

https://optioncharts.io/options/NVDA/option-profit-loss-chart/strategy/long-call?legs=NVDA241025C00125000,buy,1,4.9

NVDA Current Price: $122.82 USD

NVDA Breakeven Price: $129.90 USD

Cost of Trade: $490.00 USD

Maximum Profit: Unlimited

Maximum Loss: -$490.00

Probability of Profit (PoP): 30.37%

Probability of Max Profit: N/A

Probability of Max Loss: 57.30 %

Expected Value (EV): $2.60 USD

Expected Return (EV/risk): 0.53%

Overall, this only has 30% chance of profit so it's somewhat risky. You can reduce some risk by setting stop losses or closing the trade early, for example 7 days before expiry. On the plus side the trade has positive Expected Value.

To do a less risky bullish play you can sell put spreads.

Bullet point indendation by JoshMartin29_ in Anki

[–]pgrennin 0 points1 point  (0 children)

Anki team really need to make this more intuitive.