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When the VIX Is This Low, Stop Selling Puts
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ticker lesson
Breakdown
0:00lesson
Unbalanced butterfly vs regular butterfly
- Rolling wide wing in makes both narrow
- Rolling narrow wing out makes both wide
- Wider wings increase range probability
- Unbalanced butterfly has extra short put spread
- Rolling wide wing in buys back short put spread
2:14lesson
Rolling middle strike in butterfly
- Rolling middle strike down widens spread
- Paying to buy middle strike
- Short two options, buying further out
- Wider butterfly has bigger profit zone
- Wider butterfly changes cost structure
4:12lesson
Avoid overtrading butterfly adjustments
- Widening butterfly increases profit potential
- Changes cost structure and may cost more
- Avoid tinkering with positions
- Let strategy play out mechanically
- Overtrading leads to inefficiency
5:58lesson
Sell premium vs directional trades based on IVR
- Sell premium when IVR is high
- Go directional when IVR is low
- S&P IVR near 12% suggests low IVR
- Avoid selling S&P puts at low IVR
- Look for individual names with higher IVR
7:45lesson
Consider actual volatility beyond IVR
- IVR low doesn't mean actual volatility is low
- Look at actual volatility metrics
- VIX under 16 suggests long call verticals
- Call verticals are cheaper than short puts
- Avoid overcomplicating options strategies
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