What is your usual profit for a $0.50 spread?

R

RGLD

Assuming you hold to expiration, my profits for a $0.50 are usually $0.08 - $0.12 depending on how how the money the spread is.

So for example a weekly put veriticle for XLE strike @ $64 would be worth $0.23. The $63.50 would be worth $0.16. The spread is worth $0.07 if held to expiration. Your max profit is $0.07 and your max lost is $0.43.


It is "strongly" advised by networks / "professionals" that holding till expiration is ill-advised. Should take at 50% profit. So following this rule your profit will be $0.03 - $0.04... Interesting..

Unfortunately commission fees will eat you ailve. The only way I can see this working is if you increase the spread width and it's usually past any market moves so when one expires ITM, the other usually expires worthless.. Adjusting the duration doesn't do much since both options are influenced together (although the NTM Option would have more volatility, I find the difference in pennys...)

Is this the life of an options trader? Picking up $0.05-$0.16 profits on a few instruments?

(The QQQ is even worse...)
 
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RGLD said:
The spread is worth $0.07 if held to expiration. Your max profit is $0.07 and your max lost is $0.43.

It is "strongly" advised by networks / "professionals" that holding till expiration is ill-advised. Should take at 50% profit. So following this rule your profit will be $0.03 - $0.04... Interesting..
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Perhaps make a different selection. IMHO the risk reward ratio is not worth it, even with high probability of win and positive expectancy.

The other point, except when I started out back in 2013, now I almost never held anything to expiry, even for very short duration options.

Good luck.
 
RGLD said:
Is this the life of an options trader? Picking up $0.05-$0.16 profits on a few instruments?

(The QQQ is even worse...)
More...
No, often I made directional bets, risky but more rewarding if I got it right. :D
 
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