Check your P&L on exit or expiry. If it's positive, the option was underpriced, if you made a loss, it was overpriced.
HELP WANTED I need a knowledgeable trader. I put up $100,000 you put up nothing. My cut is the first $10,000 each year, you keep the rest. Apply to this thread
Because it's the fair price for a digital option and you could perfectly hedge it there (barring transaction costs).
Did I somehow suggest that it's riskless? I said it's consistent - meaning, you realize a reasonable return to risk ratio.
To the extent you're continuing to feel generous, any chance you'd be willing to go through an example of how you'd identify and play an earnings vol dislocation?
How about a reliable return of 40% on max 5 mill with the options strategies you mentioned? Is this in the realm of what is possible?