High IV Neutral Credit Strategies
Big Lizard
Neutral to Bullish Outlook & High Volatility The big lizard is like the Jade Lizard except it basically uses a straddle for larger credit received. Directional Assumption: Neutral / Bullish Setup: – Sell 1 short ATM Straddle– Buy OTM Call Use on Stocks $75 or higher so I can collect Read more…
Strategies
Put Backspread
The Setup Sell 1 ATM Call; Buy 2 OTM Calls at Higher Strike Price for a net debit. Timeline Enter trade for 45 – 90 days Volatility Since I am a seller of this option I will only enter the trade when IV is below 50%. Rising IV will help Read more…
Strategies
Long Butterfly Spread
Neutral Outlook & High Volatility Directional Assumption: Neutral Setup: This spread is typically created using a ratio of 1-2-1 (1 ITM option, 2 ATM options, 1 OTM option).– Buy Call/Put (above short strike)– Sell 2 Calls/Puts– Buy Call/Put (below short strike) A long butterfly spread is a neutral position that’s Read more…
High IV Bearish Credit Strategies
Front Ratio Put Spread
Neutral to Slightly Bearish Outlook & High Volatility Directional Assumption: Neutral to Slightly Bearish Setup: – Buy an ATM or OTM put option– Sell two further OTM put options at a lower strike Timeline: 45 days Ideal Implied Volatility Environment: 50% or greater. Profit Target: 25% – 50% of the Read more…
Strategies
Option Credit Trading Strategies
These are my #1 go-to strategies Wrap your head around this: Buy into Weakness and Sell into Strength High IV Neutral Strategies IV Rank above 50% Low IV Neutral Strategies IV Rank below 30% Earnings Strategies IV Rank above 50% Reminders Options Strategy – Choose a strategy that best fits the Read more…
