You can certainly make adjustments by rolling your spreads to the left or to the right, but this trade will not work when the market whipsaws back and forth. It only works well when the market goes sideways. When it whipsaws, you end up locking in losses on all of the adjustments. If the market keeps trending one direction, it's easier to manage.
great video. Do you think that in your example, the trade can be rebalanced toward the higher probability of 78% if the strikes of each spread were skewed to the left or right of the current price? ie if the trend was up, move the bull put spread closer to ITM and move the bear call spread further OTM?
Thanks for the comment. Everyone will have their own opinion about how to use Standard Deviations. It's just my belief that technical analysis works, so why leave it out of the equation? Placing the SD right at the money assumes that there is an equal chance of going up or down at any given time, but I don't believe that is true. Most technicians out there would agree. Anyway, we will all have our opinion on this. I just wanted to expand the way we think about analyzing trades. Thanks!
You can certainly make adjustments by rolling your spreads to the left or to the right, but this trade will not work when the market whipsaws back and forth. It only works well when the market goes sideways. When it whipsaws, you end up locking in losses on all of the adjustments. If the market keeps trending one direction, it's easier to manage.
sjoptions 10 months ago
great video. Do you think that in your example, the trade can be rebalanced toward the higher probability of 78% if the strikes of each spread were skewed to the left or right of the current price? ie if the trend was up, move the bull put spread closer to ITM and move the bear call spread further OTM?
wilwal1299 10 months ago
Comment removed
Ideasmiths 1 year ago
Thanks for the comment. Everyone will have their own opinion about how to use Standard Deviations. It's just my belief that technical analysis works, so why leave it out of the equation? Placing the SD right at the money assumes that there is an equal chance of going up or down at any given time, but I don't believe that is true. Most technicians out there would agree. Anyway, we will all have our opinion on this. I just wanted to expand the way we think about analyzing trades. Thanks!
sjoptions 1 year ago
good video very good load more of this up
klayed 1 year ago
@klayed Thanks, I hope this gave you a new perspective on analyzing probability.
sjoptions 1 year ago