1122 strategy

Discussion in 'Options' started by Temujin79, Apr 5, 2024.

  1. jamesbp

    jamesbp

    Axon and jys78 like this.
  2. But his strategy is actually collect credit by selling otm put soread
     
  3. jamesbp

    jamesbp

    Whether you are paying/receiving premium is irrelevant to whether you are buying/selling the spread

    In this case the OP claims to be
    - selling for a credit
    - a debit spread

    He's just mangling the terminology, which might not seem important but can lead to expensive execution errors, and why you should question the credibility of the post.
     
  4. Matt_ORATS

    Matt_ORATS Sponsor

    Yes, I am testing this set up. This is a paper trade sold for 0.40 now up 0.10.
    It is called a bear trap using puts. It can be used with calls too, bull trap.
    It is basically 1:10 risk reward which is not great.

    upload_2024-4-8_9-9-2.png
     
  5. jamesbp

    jamesbp

    In reallity, just a form of broken/raised wing condor
    In your example

    Core Position is 195-197-198-200 Put Condor
    + embedded 193-195 / 193-197 Verticals

    Most traders should, but don't evaluate whether risk/reward of selling FOTM Put Verticals are worthwhile as premium can realtively small

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