Hello everyone! Today i want to share some trading ideas with you!
1
For all the FinTwit folks that mock optionselling traders as "picking up pennies in front of a steamroller", you are only correct in a certain scenario. $Cboe Volatility Index(VIX)$
Lemme educate you ...
- High PoP + high IV edge = good for the options writer (you’re paid for risk compression)
- High PoP + low IV edge = often bad for the options writer (you’re "picking up pennies" in front of variance expansion)
Make sure you understand the options-writer's trade
That said, I'm assuming legit options-writers are not doing this, but it still warrants a reminder ... DO NOT take low PoP trades ... especially if IV edge is also low!
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