When should we adjust strangles?
Study shows that it is more profitable to adjust when the strike has been breached.
Category: Strangle
Undefined Risk is Less Risky
What??!! Can’t really understand this one. But sounds like Kai is saying that there is a <1% chance of strangle losing an amount that is the same as premium collected. Iron Condors on the other hand, have 4% chance of losing BPR. As a result, portfolio is more volatile if it comprises mainly of defined risk trades. I need to look at this more in depth.
Reserve Capital
This video provides guidance on how much buying power (BP) to use for trades based on the VIX level.
Lower delta trades have bigger BP expansion. 5 delta strangle BP can expand up to 3.4x.
Full video here (3 Jun 2019)
20 Percent Freedom 