How to short GME volatility with a small position
Given the high volatility and rapid rise in the stock price of GME (GameStop) in history, special attention should be paid to risk management when adopting strategies. Here is an adjusted strategy to adapt to this characteristic of GME:
Dynamic hedging strategy combined with selling straddle
Sell straddle strategy: It can still be used as a basic strategy, but the strike price and expiration date need to be selected more carefully. Choose a wide enough price range to ensure that you can make a profit when the market is sideways or fluctuates slightly.
Dynamic hedging:
Dynamic hedging:
Buy protective options: In view of the potential risk of rapid rise in GME, in addition to buying high out-of-the-money call options as insurance, you can also consider adjusting the position of protective options in a timely manner according to market dynamics and GME's short-term technical indicators (such as RSI, MACD). When the indicator indicates that the probability of rising increases, you can buy more or higher strike price call options for hedging.
Use stop-loss orders: For sold option positions, set a tight trailing stop-loss order, and close the position immediately to reduce losses once the stock price moves rapidly in an unfavorable direction.
Rolling adjustment: If the GME stock price deviates significantly from your expected range, consider rolling your option position, that is, selling new options and closing the original position to adapt to the new market situation.
Small-scale test: Due to the high volatility of GME, it is recommended to trade with a smaller position at the beginning, gradually accumulate experience and adjust the strategy.
Closely monitor market information: GME is often affected by social media and market sentiment. Pay close attention to discussions on social platforms such as Reddit, Twitter, and moomoo, as well as any news or announcements that may affect the stock price, so as to react quickly.
Psychological preparation: Trading highly volatile stocks such as GME requires strong psychological endurance and strict discipline, and be ready to deal with extreme market fluctuations at any time.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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lee… OP 71180249 : Hahahah
Dempsey : Good luck haha
beam_me_up : Edit: "How to go broke"
lee… OP Dempsey : Hahah
lee… OP beam_me_up : Too many people are losing money on GME. They will choose to sell after the stock price rises. It is estimated that GME will not rise.
5060 lee… OP : shut up bot
5060 lee… OP : bot
72945863 5060 : won't rise but up 70 percent gtfo
MonkeyGee : go for it
71039592 : Edit: How to be a part of the problem
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