Best trade for this scenario

Discussion in 'Options' started by tradingjournals, Jan 25, 2012.

  1. Assume that over the next two weeks, XYZ is estimated to have a top around 61.50 or lower. What is the best trade to put in to implement the above view. XYZ is an index etf, so its movement is inverse to its implied IV. XYZ has monthly and weekly chains. In answering the question, the assumption is that XYZ is trading around 60.60.
  2. The best trade is the one that makes the most money. Which one that will be depends on a number of factors - size of move, time until move, R/R of strategy chosen, IV change, etc.. All of these will only be known in hindsight.