10:11, A recurring theme: "So you're saying the options are perfectly priced really that's what you're saying -- Exactly!". This is why we can be product independent. Who cares really about what the underlying is? On all products, we need to always look at the same parameters:IVR, liquidity, expected moves, duration, binary events, etc... And that's it...
The low IV option is priced for a small down move and the high IV option is priced for a large move. Larger moves, SPY put makes more. Smaller move, SPY put loses less.
The is a total confusing presentation. A higher IV instrument will move more than a lower IV. % change in QQQ will be more than 1% , when SPY moves 1%. This is a nothing burger. Papa BAT made the right call “ the options are priced perfectly”
so buy the SPYs and sell the QQQs ?
Not exactly, because you also need to consider the probability. For example, QQQ has higher probability of 2% move than SPY.
I love these shows. Keep it up 👍 guys.
You're always going to make more on the % move since SPY is more than QQQ. The % move isn't equal...
10:11, A recurring theme: "So you're saying the options are perfectly priced really that's what you're saying -- Exactly!". This is why we can be product independent. Who cares really about what the underlying is? On all products, we need to always look at the same parameters:IVR, liquidity, expected moves, duration, binary events, etc... And that's it...
Should have compared how qqq correlates to spy to have a fair comparison. I’m guessing IV somewhat works for that but not sure.
What about assignment risk ?
Good work .
WHY WOULD A LOWER IV OPTION HAVE A LARGER %MOVE? SHOULDN'T BE THE OTHER WAY AROUND?
The low IV option is priced for a small down move and the high IV option is priced for a large move. Larger moves, SPY put makes more. Smaller move, SPY put loses less.
Because sh!t happens. Low IV brings a higher risk of a tail risk. In low IV environment, the large moves (in %) are not priced in.
I want to see this with OTM butterflies
The is a total confusing presentation. A higher IV instrument will move more than a lower IV. % change in QQQ will be more than 1% , when SPY moves 1%. This is a nothing burger. Papa BAT made the right call “ the options are priced perfectly”
This entire channel is a giant nothing burger
His speech pattern makes it painful to follow, but the mute is a Godsend.
Classy.