Call Debit Spread

Bullish Outlook & Low Volatility The Setup Buy 1 ITM Call; Sell 1 OTM Call at Higher Strike Price for a net debit. Timeline 45-60 days until expiration is optimal. Volatility Since I am a seller of this option I will only enter trade when IV is below 50%. Rising Read more…

Custom Naked Put

Bullish Outlook & High Volatility The Setup Sell 1 OTM Put; Sell 1 OTM Call; Buy 1 OTM Call at Higher Strike Price. Timeline 30-60 days until expiration is optimal. This gives enough time for theta to work out. Volatility Since I am a seller of this option I will Read more…

Broken Wing Butterfly

Bullish Outlook & High Volatility Directional Assumption:  Neutral / Slightly Directional Setup: – Buy Call/Put (above short strike)– Sell 2 Calls/Puts– Buy Call/Put (below short strike) When do we close Broken Wing Butterflies?When routing this strategy, it is usually for a very small credit. Therefore, we won’t look to close Read more…

Short Naked Put

Bullish Outlook & High Volatility Directional Assumption: Bullish Setup: Sell 1 OTM Put below the market for a credit. Timeline:- 30-60 days.This gives enough time for theta to work out. Ideal Implied Volatility Environment: 50% or higher IV. When IV is high, I want to sell vertical spreads hoping for an IV Read more…

Bull Put Credit Spread

Bullish Outlook & High Volatility The Setup Sell 1 OTM Put; Buy 1 OTM Put at Lower Strike Price. The combination of options should result in a net overall credit. Timeline 30-60 days until expiration is optimal. This gives enough time for theta to work out. Volatility Since I am Read more…