DERM - Selling Puts - Opened Limited Orders
DERM - expect volatility. Overall, bullish outlook. Could have significant swings.
The options are so expensive right now it makes for an optimum to sell. I don't like either a credit call spread or any credit spread in this situation. Simply selling puts seems like the correct strategy.
I've placed a limited order to sell 3/16 $25 puts at $5.6, mid price between ask/bid. (current ask/bid is 5.2/6) I typically place limit orders at a more optimal price than mid-price, but the premium is so high I didn't feel the need to.
$5.60 premium (credit) pushes my break even (or buy price if the option is exercised) at $19.40. Based on the charts & overall bullish outlook, I feel pretty comfortable with that risk.
DERM 27.90
D = -.1892
G = .0716
T = -.0183
IV = 236.39% (vs. 49.29%)
Theoretical value is .43
The options are so expensive right now it makes for an optimum to sell. I don't like either a credit call spread or any credit spread in this situation. Simply selling puts seems like the correct strategy.
I've placed a limited order to sell 3/16 $25 puts at $5.6, mid price between ask/bid. (current ask/bid is 5.2/6) I typically place limit orders at a more optimal price than mid-price, but the premium is so high I didn't feel the need to.
$5.60 premium (credit) pushes my break even (or buy price if the option is exercised) at $19.40. Based on the charts & overall bullish outlook, I feel pretty comfortable with that risk.
DERM 27.90
D = -.1892
G = .0716
T = -.0183
IV = 236.39% (vs. 49.29%)
Theoretical value is .43
Trade active:
Limited order placed. Adjustment to puts sell price.
Sold at $5.49. Lower than initial limited order, but still a HUGE premium, especially for an OTM put. New break even price is $19.51.
Strategy - Let time premium dissipate &/or IV% decrease. It's highly likely I will NOT carry the puts till expiration.
Sold at $5.49. Lower than initial limited order, but still a HUGE premium, especially for an OTM put. New break even price is $19.51.
Strategy - Let time premium dissipate &/or IV% decrease. It's highly likely I will NOT carry the puts till expiration.
