Profiting from the Madness - Inverted IC - ultra high IV

Discussion in 'Options' started by caroy, Jan 27, 2021.

  1. caroy

    caroy

    Just throwing this out there as an idea. I'm probably missing something with this and I'm sure getting filled would be a bitch at the moment so this is probably irrelevant.

    With crazy high IV the deep ITM call and put spreads trade in odd ways. Trumpification of the options and what not.

    So why not an inverted Iron condor. Buy the deep ITM put spread like as deep as you can go and a deep ITM call spread. Pin that bitch in a wide range and things go to full carry. Not much risk and it is defined. IDK playing around with some ideas.

    example in GME buy the 95-100 call spread and buy the 320-315 put spread. Ends up between 100 - and 315 goes full carry.

    Hard to model prices as b/a are a mile wide.

    Just an idea. Let me know how I'm not thinking right.
     
    jys78 likes this.
  2. caroy

    caroy

    looking for an inexpensive way to get in with a high PoP.
     
    • I would never open an ITM position.
    • Always start with OTM options.
     
  3. caroy

    caroy

    because of exercise risk and assignment fees? you're probably right.
     
  4. jys78

    jys78

    You could try a calendar put. Let's face it, GME is not going to remain >$500 regardless of all the fundamental analysis we've seen including here on this "elite" board.
     
  5. caroy

    caroy

    True. I just don't like the premium i'm paying for the calendar spreads at least when I model them. I'll take a look though.
     
  6. caroy

    caroy

    Eying a calendar put in AMC though. GME too rich for my blood.
     
  7. caroy

    caroy

    Probably look for the same on some of these other pump and dumps