The past is not a prediction of the future nothing predicts the future stocks can do anything. If a stock has not moved than its premium is going to be too low to take the short bet. Just because you get lucky predicting the future using the past doesn't mean you will be lucky in the future. What about the people who sell options and the stock rips or Face-Off because the volatility increases after they sell the options
I've never traded a time spread like this. Typically, when you are short a call or a put, you are required to have cash in your account to cover the stock, which in this case would be 3200 x 100 x 2 = $640,000. Would this be true in this scenario? If so, your return is much lower. I'm not trying to be picky, just learn.
AMZN 3,200 July Call clearly identifies the Option in question at the price of $360.68. So, the multiplier is always 100 by the Option price - as every Contract represents 100 shares in the underlying asset - in arriving at up-front investment in getting into first aspect of the four-legged put & call combo trade in this SMB example.
Would like to see some videos about implied vol skew, term structure, how they change over time, and how deviations from nominal levels can inform strategy and strike selection.
exactly ! all these trades look so great in retrospect -- easy money, right?..... however, it's hard to know in advance what a stock is going to do six months later or a year later !
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The past is not a prediction of the future nothing predicts the future stocks can do anything. If a stock has not moved than its premium is going to be too low to take the short bet. Just because you get lucky predicting the future using the past doesn't mean you will be lucky in the future. What about the people who sell options and the stock rips or Face-Off because the volatility increases after they sell the options
Love the idea to be the seller...and collect those premiums! 😎👍
I've never traded a time spread like this. Typically, when you are short a call or a put, you are required to have cash in your account to cover the stock, which in this case would be 3200 x 100 x 2 = $640,000. Would this be true in this scenario? If so, your return is much lower. I'm not trying to be picky, just learn.
AMZN 3,200 July Call clearly identifies the Option in question at the price of $360.68. So, the multiplier is always 100 by the Option price - as every Contract represents 100 shares in the underlying asset - in arriving at up-front investment in getting into first aspect of the four-legged put & call combo trade in this SMB example.
Would like to see some videos about implied vol skew, term structure, how they change over time, and how deviations from nominal levels can inform strategy and strike selection.
Nice work
Thanks
How do you know when you're getting a good "deal" on the price of an option?
Did you know in advance that AMZN is not going to move, and you would be able to benefit from theta decay?
exactly ! all these trades look so great in retrospect -- easy money, right?..... however, it's hard to know in advance what a stock is going to do six months later or a year later !
He didn't, that is why he is telling you what you could have done.
@@jcrockett870 in hindsight, all such fancy strategies make money. I like to keep my plays straight forward.
with premium its easier to be the casino not the player. sell theta when its elevated