Some times inverted strangles are meant to reduce losses. When total credit collected is greater than width of inversion, we look to take profit at 50-75% of potential profit.
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When To Take Profit For Inverted Strangles
Tag: Inverted Strangle
Inverted Strangles
Good video by Dr Jim that introduces inverted strangles.
Key points:
- First move untested side to same strike as tested strike -> becomes a straddle
- Price continues to move against us. Move option leg that we moved previously to where price is currently (ATM).
- Roll inverted strangle out multiple times to collect as much premium to offset max loss which is the width of the inverted strangle.
Watch full video.
20 Percent Freedom 