Why selling OTM spreads is guaranteed to wipe out your profits
Telah dikemas kini
Trading without a risk management is gambling. Gambling relies on hope.
Selling OTM spreads depends on a 75% success rate and surviving a few big losses. The RR is very low if you are aiming to collect 25% of the spread. I traded 12 months solely on BullPut and this has taught me well. It's a losing strategy based on the misconception of high win rate and "consistent" income.
Using ITM spreads, you can enjoy higher RR and live to make another trade. I took a calculated loss on AAPL with RR 1.6.
Selling OTM spreads depends on a 75% success rate and surviving a few big losses. The RR is very low if you are aiming to collect 25% of the spread. I traded 12 months solely on BullPut and this has taught me well. It's a losing strategy based on the misconception of high win rate and "consistent" income.
Using ITM spreads, you can enjoy higher RR and live to make another trade. I took a calculated loss on AAPL with RR 1.6.
Dagangan ditutup: hentian tercapai
Dagangan ditutup: hentian tercapai
Assuming OTM Bull Put at 145/150 (above)
Penerbitan berkaitan
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.