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Watch Tom Preston Build and Place a Trade Live on Air

NowPress play to follow along0:00 / 5:02
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ticker lesson

Breakdown

0:00lesson

Option skew analysis on Sienna

  • Stock at 386, closer to 385 than 390
  • 380 put expected richer due to proximity
  • Skew points to upside
  • Compare 390 to 395 call to 380 put
  • Market wided with 1610 ask price
2:20lesson

Volatility assessment and trade setup

  • Volatility at 65%, IV rank 24%
  • Check 14-day volatility
  • Sell option with 68-69% profit
  • Max profit 85, max risk 165
  • Risk-reward ratio decent
4:46Sienna· ticker

Sienna — bullish, 385 is the line

  • Bullish on Sienna
  • Skew points to upside
  • 71% probability of max profit
  • Light two — market tight
  • Bearish on ESTs, 74% IV

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