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How to Sell Premium When Volatility Is Spiking, With Dr. Jim Schultz
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Chapters15 segments · tap to seek
ticker lesson
Breakdown
0:00lesson
Volatility as an Opportunity
- Premium sellers like high volatility
- Volatility is rising today
- Walk through how to take advantage of rising volatility
1:53lesson
Volatility and Market Direction
- Market direction is 50/50
- Nondirectional strategies like time and volatility
- Volatility mean reversion is the focus
3:31lesson
Volatility Mean Reversion
- Volatility mean reversion is empirically shown
- Mathematical models like OU and GARCH support this
- Volatility likes to live on the lower end
5:27lesson
Volatility and Option Pricing
- Option prices and volatility move together
- Implied volatility affects option prices
- Sell volatility when it's high
6:58VIX· ticker
VIX Volatility Behavior
- VIX spikes and then collapses
- Volatility likes to live on the lower end
- Volatility can expand rapidly
8:33lesson
Strategies for Selling Volatility
- Sell volatility when it's high
- Buy volatility when it's low
- Volatility mean reversion is the key
10:13VIX· ticker
VIX Historical Context
- VIX at 1830 is not extremely high
- Historical average is around 16
- Extreme stretches are rare
11:58lesson
Option Pricing and Volatility
- Option prices and implied volatility move together
- Sell volatility when it's high
- Volatility contraction benefits sellers
13:43lesson
Understanding Volatility Dynamics
- Volatility contraction leads to lower option prices
- Volatility mean reversion is a key strategy
- Volatility can expand out of nowhere
15:34META· ticker
Meta as a Volatility Play
- Meta is overblown in its move down
- Sell a vertical put spread for $2
- Risk $300 to make $200
17:26lesson
Risk and Return Trade-off
- High probability trades require higher risk
- Risk more on losers than winners
- No holy grail in trading
19:06META· ticker
Meta Volatility Strategy
- Sell a 640 635 put spread for $2
- IV rank at 43.3 is a good entry point
- Manage strategy at 50% of max profit
20:44lesson
Volatility and Risk Management
- IV rank is a key metric for volatility
- IV rank of 30 or higher is a good entry point
- Higher IV rank is better for volatility sellers
22:21NASDAQ· ticker
NASDAQ as a Volatility Play
- NASDAQ has an IV rank of 70
- Sell a 730 735 call spread for $218
- Risk $280 to make $218
24:02lesson
Volatility and Market Outlook
- Volatility is cooling off
- Position to benefit from volatility mean reversion
- Strategies for selling volatility when it's high
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