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Selling Premium After a Red Day: Does It Actually Work?
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ticker lesson
Breakdown
0:00lesson
Selling premium after red day changes odds
- Research on selling premium after red day
- Trends changed post-COVID
- Comparing pre-COVID and post-COVID
- Significant impact of COVID selloff
1:32lesson
Average P&L shifts post-COVID
- Testing 16 delta strangles
- 45 DTE vs 21 DTE
- 2013 to 2026 data
- Red day entry conditions
- Probability of profits
- Premium collected changes
3:22lesson
Buy the dip community post-COVID
- Buy the dip trend post-COVID
- More retail traders involved
- Lessons from 2020
- Market shifted to more stable regime
4:59lesson
Win rates consistent pre/post-COVID
- Win rates between 67% and 75%
- Consistent pre/post-COVID
- P&L changes with market dynamics
6:43lesson
Downside risk post-COVID
- Downside risk with large down moves
- Tail events more dramatic
- Trend reversed post-COVID
- Higher premiums with higher risk
8:22lesson
Selling into volatility trade-offs
- Higher premiums with higher risk
- Tail risk increases with volatility
- Timing matters more than being bearish/bullish
- Big moves often follow big drops
10:11lesson
Compensation for volatility
- Compensation for higher volatility
- Set trades to match risk tolerances
- Potential P&L volatility expected
- Trading strategies adapted to conditions
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