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$900 vs $650: How One Strike Move Changes Your Buying Power
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Breakdown
0:00lesson
Buying power fluctuates within same strategy
- Buying power varies by strike selection
- Same strategy, different strikes → different risk
- Risk determines buying power requirement
- Dynamic like delta, theta, vega
1:47NFLX· ticker
Netflix — 30 delta put, $900 buying power
- 30 delta put → $900 buying power
- 68 strike, stock at 73
- Moving strike to 65 → $650
- Further OTM = less risk
3:43NFLX· ticker
Netflix — 72 strike, higher buying power
- 72 strike → higher buying power
- Closer to ATM = more risk
- Stock at 73, strike at 72
- Lower hurdle to go in the money
5:25AAPL· ticker
Apple — 36 delta put, $5,000 buying power
- 325 strike, stock at 313
- 320 strike → $5,500
- 335 strike → $4,000
- Closer to ATM → higher buying power
7:04lesson
Buying power scales with risk across strategies
- Applies to short strangles, ratio spreads
- More risk → higher buying power
- Less risk → lower buying power
- All short premium strategies follow this
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