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Monthly Options. This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways and sometimes the woods. Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.
I have been trading the equity markets with many different strategies for over 40 years.
Strategies for Trading Volatility With Options
Terry Allen's strategies have been the most consistent money makers for me. Neither tastyworks nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. Options are not suitable for all investors as the special risks inherent to options trading my expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options before investing in options. Vermont website design, graphic design, and web hosting provided by Vermont Design Works. Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval.
Please read Characteristics and Risks of Standardized Options before investing in options. Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
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High Performance Options Trading: Option Volatility and Pricing Strategies w/website | Wiley
Also note that no commissions have been included in these calculations. Thus these options are overvalued by almost 2x! Why not use the nearby options?
You could. However, the farther-out options are attractive because of their higher vega, or volatility sensitivity. It also means that if IV comes down during the life of this position very likely , these options will respond better, giving you an early gain. The favorable terms of this trade are illustrated in the Graphic Analysis of this position shown in Figure 3.
The breakeven points where you neither make nor lose money are at Looking at the price chart for Apple, it is easy to imagine it staying within that range. What is the risk of this position?
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With a naked strangle, the risk is that the stock may move too far in either direction, pushing one of the legs into the money. If either leg goes into the money, you should close or adjust your position. One possible adjustment would be to completely close the strangle and open a new one, re-balanced around the current stock price.
However, if IV has come down, you might be better off simply closing this trade and looking for another high IV stock on which to write a new strangle. All rights reserved.
Important Note: Options involve risk and are not suitable for all investors.