Weekly Trade Breakdown: Profiting from Good IV%
Since I’m on a short vacation today, I’ll take a moment to briefly share how I’ve utilized good implied volatility (IV%) to gain profits through options selling. By strategically selecting options with high IV%, I can secure steady profits with minimal risk. Here’s a breakdown of how I’ve managed to do just that with my recent trades.
1. $Domino's Pizza (DPZ.US)$ Current Price: $409
· Sell Call: Strike $485, Qty 8, Premium $0.51, Total Call Premium: $0.51 * 8 * 100=$408
Price Movement for Strike Price: +18.58% increase from 409 today , VERY UNLIKELY
· Sell Put: Strike $355, Qty 8, Premium $1.28, Total Put Premium: $1.28 * 8 * 100=$1,024
Price Movement for Strike Price: -13.20% decrease from 409 today , VERY UNLIKELY
As a Strangle, if DPZ stays between $355 and $485 until expiration TODAY, I keep the entire premium=$408+ $1,024=$1,432
2. $NVIDIA (NVDA.US)$ Current Price: $134.8
·Sell Call: Strike $138, Qty 21, Premium $0.25, Total Call Premium: $0.25 * 21 *100=$525
Price Movement for Strike Price: +2.38% increase from 134.8 today , UNLIKELY
If NVDA stays below $138 until expiration TODAY, I keep the entire premium of $525.
3. $Super Micro Computer (SMCI.US)$ Current Price: $45.95
· Sell Put: Strike $36.75, Qty 70, Premium $0.05, Total Put Premium: $0.05 * 70 * 100=$350
Price Movement for Strike Price: -20.04% decrease from 45.95 today , VERY UNLIKELY
If SMCI stays above $36.75 until expiration TODAY, I keep the entire premium of $350.
·Sell Call: Strike 320 Qty 10 x Premium $1.10, Bought Back Call at: $0.45
·Premium Collected: $1.10 * 10 * 100 = $1,100, Cost to Close: $0.45 * 10 * 100 = $450
·Net Profit: $1,100 - $450 = $650 (Closed Yesterday)
Summary of Potential Profit this week:
· DPZ: $1,432 profit sealed unless price movement +18.58% to hit the Call Strike of $485, and -13.20% to hit the Put Strike of $355 today.
· NVDA: $525 profit sealed unless price movment +2.38% to hit the Call Strike of $138 today.
· SMCI: $350 profit sealed unless price movement -20.04% to hit the Put Strike of $36.75 today.
· DUOL: $650 realized profit (position already closed).
The total profit from all trades and potentially harvest all by today is USD 2,957.
EASY PROFIT SEALED!
EASY PROFIT SEALED!
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八字不合 : How much margin is required for that?
约翰の理财库 OP 八字不合 : Strike price x Qty x 100 = Capital / Margin required
Boo Boo Y : Hi John, need to ask you some info on options trade. I'm still in the learning stage.
If my guess for certain stock is NOT going to rise, let say 10 % by this Friday 18 Oct 24, so on 14 Oct I buy a SELL CALL of that stock of strike price, matured on 18 Oct Friday, which is about 11 % of today's current price. Then on Tuesday 15 Oct, stock price rise to 5% of Monday 14 Oct stock price.
So by buying a BUY CALL of that same strike price, of the same Qty (lot), matured on 18 Oct Friday, is it considered as I'd close the option trade of that SELL CALL ?.. and still gain profit ? i.e. the premium.
约翰の理财库 OP Boo Boo Y : Yes but you’ll only gain the Sell price - Buy price , not the full premium, unless you wait until expiry and collect full premium.
But I must remind you that generally Selling naked call is way risky than selling cash secure put .