All the time I was wrongly thinking that one can make maximally +100% with options shorting (especially with a CashSecuredPut trade (just this single one leg trade, nothing more), ie. earning the full credit. But today I learned that there is in fact no such limit Don't you believe? Here's such a setup: https://optioncreator.com/st5qtzw S=0.54 DTE=16 K=1.50 Pr=1.20 These data are actually from an intraday snapshot of options data (Expiry 2023-05-19) of ticker APRN on last Friday. Ie. one can earn maximally the full credit of $1.20, but this in reality makes 1.20 / (1.50 - 1.20) * 100 = 400% profit! since one has invested only $1.50 - $1.20 = $0.30 . Q.E.D. The screenshot below has the data of at/after market close on Fri, but the above snapshot was much earlier (I think it was sometime around 09:59 EDT on Fri).
With such short leg you can earn at max the premium. Everything else is playing with definitions of "invested capital".
Yes, and IMO it's the most important number in trading, since all success/fail is based on it, ie. calculated from it... I'm scanning and ranking hundreds of symbols and then I need such a basis for percentual comparisons, rankings, scorings...
and Correction-1: it was ExpDate 2023-05-12, not 2023-05-19 Correction-2: the snapshot was from 2023-04-26-We-154550-EDT, not last Friday. So-rry