How High Implied Volatility Can Work Against Options

Traders have huge expectations for market movements the next 2 days due to CPI & FOMC. This has short dated implied volatility extremely high, which may pose a challenge for short term long options holders.

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*Note: This presentation is intended for general information and entertainment purposes only. No mention of company names, trading strategies or illustrative examples constitute investment advice. SpotGamma advises you to seek investment advice from a licensed professional.

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Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

[davidcompes]

Its really stunning!! Even options 2 stikes out of the money that expire tomorrow 12/13, have a premium of more than 1% and they are 0.5% out of the money!! My bróker turned crazy about the premiums!! I never saw an option that expires at the next day with a 1.5% premium !!! Stunning!!

[johnnyprout]

I did a credit spread above the market on Friday around 12 noon with a 12/14 expiration, if iv crush happens I would get my credit faster correct?

[unapolagetic]

You don't need nearly as big of a move if you have a spread that's close to the money.

[grandmastertrader]

The content, comments and replies here are next level.

[zofg]

If only theres a way to leverage up by selling options...