especially if the high IV is promising something REALLY huge, like the meteoric rise in those meme stocks...
Call DEBIT SPREADS
- Thread starter James.DeGori
- Start date
especially if the high IV is promising something REALLY huge, like the meteoric rise in those meme stocks...
Naked long calls are the worst trade of all -market rises IV drops- you can be 100% right and lose a bundle
You have to also follow/trace the IV, and events that could affect it, like FDA decisions, Earning Reports, as well when it can get being affected by such events like new Covid strains like this new Omicron last Friday (tourism industry (airlines, sealines) down, oil down, ..)
FYI:
^VIX CBOE Volatility Index 28.62 +10.04 is up +54.04%
See also the most losers, most gainers, most actives lists at YahooFinance etc:
https://finance.yahoo.com/losers
https://finance.yahoo.com/gainers
https://finance.yahoo.com/most-active
...
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If it is a spread then it isn't naked, correct?
Correct- some people, no names mentioned, but some folk like doing a ratio spread too. Buy one call, sell 2 further out of the money calls based on limited range of trade- I would not recommend that on stocks, American style -risk of assignment/exercise at any time. A fund was blow up not that long ago doing 3x1 ratio call spreads. I hate calls!