Obviously, "safe" is rather relative, but I imagine things that take advantage of selling premium in a hedged manner could benefit.
Obviously, any play requires strong assumptions. One such assumption is that this will be over in a few months at most; so it seems that there should be a way to profit off of IV eventually dying down, and one such way to do that is with a calendar spread.
A put calendar spread could allow the front month to continually expire, and if the strikes are sufficiently high enough, say at 500, or even 100, then you could keep selling elevated premium until IV crushes and then you cash in the long put. Obviously, if the short put goes too DITM far earlier than expected, the play goes against you, so this only works if you think in the short-term the prices will remain elevated and you can keep raking in short puts.
I bought GME@200 calendar spreads earlier for this week and last week and was able to flip them from 15 to 35...I did not hold until tomorrow's expiration because I got spooked by the volatility; one thing that surprised me was that as the stock price went up, the breakeven point in the simulations also kept going up... the IV of the next week was increasing so much! Is this "skew" since the spread graph was not a symmetrical point but kind of tapered off to the right? If GME expires with the front week OTM I will be remiss; I almost managed to buy the short call back for cheap today but with the brokerages being buggy I missed my shot at having a few open call options on GME going into next week...
Are calendar spreads a safe-ish play? Perhaps a put spread, or a straddle calendar spread instead would best profit from IV? Or would you rather do a reverse calendar spread with all this IV? I imagine selling a DITM call would eventually bear fruit so long as you kept delta managed...Assuming natural value of GME should be in the low double digits.
Obviously, any play requires strong assumptions. One such assumption is that this will be over in a few months at most; so it seems that there should be a way to profit off of IV eventually dying down, and one such way to do that is with a calendar spread.
A put calendar spread could allow the front month to continually expire, and if the strikes are sufficiently high enough, say at 500, or even 100, then you could keep selling elevated premium until IV crushes and then you cash in the long put. Obviously, if the short put goes too DITM far earlier than expected, the play goes against you, so this only works if you think in the short-term the prices will remain elevated and you can keep raking in short puts.
I bought GME@200 calendar spreads earlier for this week and last week and was able to flip them from 15 to 35...I did not hold until tomorrow's expiration because I got spooked by the volatility; one thing that surprised me was that as the stock price went up, the breakeven point in the simulations also kept going up... the IV of the next week was increasing so much! Is this "skew" since the spread graph was not a symmetrical point but kind of tapered off to the right? If GME expires with the front week OTM I will be remiss; I almost managed to buy the short call back for cheap today but with the brokerages being buggy I missed my shot at having a few open call options on GME going into next week...
Are calendar spreads a safe-ish play? Perhaps a put spread, or a straddle calendar spread instead would best profit from IV? Or would you rather do a reverse calendar spread with all this IV? I imagine selling a DITM call would eventually bear fruit so long as you kept delta managed...Assuming natural value of GME should be in the low double digits.
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