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K. Your risk is $5.00 but since 3.80 credit received, overall risk should be 1.20 ($120) ignoring assignment and related issues. Note: you can be assigned on that short leg, which could result in temporary need for $900 (but there would be some value in your 4 strike to help you unwind it)...

I would hope you are not seriously considering such a trade! You are taking a bullish position on a bearish product. The long time frame will likely cause you to deal with the impending reverse splits (one or two perhaps before Jan expiry). The 5-3.80=1.20 does not give a comprehensive...

FWIW: In case it may not be clear: VIX is the untradeable index, which is a computed value: see: "https://cdn.cboe.com/resources/futures/vixwhite.pdf". The tradeable options you are referencing actually relate to the /VX Futures (each expiration if from a unique /VX futures product). Note...

IFF you were approximating a covered call, your underlying would be /VXF23 -- using the wrong underlying (next month) is overstating what would be possible by about $6 or so.

K.. Now I understand! Ouch! It seems that will severely handicap you in improving trading performance. -- Beware that covered calls on UVIX will blead you dry! Look at long term performance of UVXY (same as UVIX before 2018 but 1.5X leverage since). These products best used leaning short.

RE: collateral: This would not work?

UVIX can be a nice product to trade.

I am guessing a bit, but would something like this be close? -- Change the strikes to dial in what you want.

While I see no reason to desire a Covered Call on $VIX.X, The underlying would actually more appropriately reference the /VX Futures associated with the chosen expiration.

Good catch! I missed that!

Looks like a nice trade!

Your line #3: "So, the above saying cannot be true, as it does not make much sense, IMO." Suggests a total disconnect/lack of understanding of what "early assignment risk means"! Perhaps you may wish to focus on that disconnect.

IMHO: (1) Find (and understand) your edge; (2) improve exploitation of that edge, (3) go to step (1) {repeat} I think quantifying/understanding your edge may prove illusive!

Would like to better understand how you manage your exit for your day-trade UVXY long. Just incase you care to share.

XIV, UVXY, SVXY, and latest was VXX that have encountered "Lots of weird shit going on there". Am concerned our inglorious politicians may be trying to deal the final death blow to these nice products!

I recall "the wheels falling off the wagon" for VXX some time back, where they ceased adherence to the management of the VXX price per the prospectus. -- I no longer trade VXX (I luckily switched over to UVXY prior to them screwing the pooch) -- They were a reliable instrument for many years...

Look at UVXY, which was identical in structure to UVIX prior to 2018, then it changed from 2X to 1.5X leverage. I was trading UVXY previously, and now have transitioned entirely to UVIX, which I prefer the extra leverage. -- switch Y axis to log scale for clearer view for "Max" duration. For...

Why would you open "UVIX Jan-2024 Short Puts"? You do realize UVIX is an eroding instrument, correct? I prefer UVIX over other products for swing trading IV.

TOS's rejection reason is "Series closing only ...". Interesting.

TOS (ThinkOrSwim) is free.