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re: Twitter puts
Posted on 1/10/21 at 5:54 pm to jangalang
Posted on 1/10/21 at 5:54 pm to jangalang
quote:
iron condors
I’ve read about it, but I’m only in options to either collect put premium at a strike I would set a limit order for that stock, or collecting call premium at a strike where I would set a limit order to sell a position.
I think those who are doing more “options trading” need to devote more time than I have to establish, monitor, and close positions.
1
Posted on 1/11/21 at 6:31 am to makersmark1
Just think of an iron condor as two credit spreads: a call spread combined with a put spread. The inner wings are the short options. The outer wings, the long options, are just there to create protection for what would otherwise be a strangle (naked call and naked put).
Multi-leg strategies should only be used after you understand why you’re choosing to do one strategy over another, as well as the risks inherent in the trade.
Multi-leg strategies should only be used after you understand why you’re choosing to do one strategy over another, as well as the risks inherent in the trade.
Posted on 1/11/21 at 9:27 am to jangalang
quote:
Usually I sell calls on top of a spike. Also when implied volatility is high. As the implied volatility drops the harder it is for contract to swing in the purchasers favor. Stock price can even rise or drop a whole point and purchaser’s profit may not even budge.
I meant to say earlier that that is the smart/correct way to sell premium. You sell when IV is relatively high (like above the 50% rank) in expectation of a retraction in IV. Think of it as a reversion to the mean. That in itself will bring down the price of the options and take your short position to profit.
Posted on 1/11/21 at 3:19 pm to bass
quote:
I prefer to short the stock and buy in the money calls. This scenario gives you plenty of profit potential if the stock drops over $2.00 and limits your risk in case the price rises.
Just asking, since I don’t know the goals of your strategy, but have you considered buying straddles or iron butterflies?
This post was edited on 1/11/21 at 3:20 pm
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