Originally Posted by
mispoken
Buck Rogers RMO isn’t terribly illiquid so it seems tradeable. Consider a February spread; its close to 45 days to expiration (Tasty trade target). I just plugged in the following February trade; sell the $20 put and buy the $15 put. This gets you, roughly, a $2.50 credit. So max loss is $2.50 (width of spread is $5 (20-15)) and max loss is width of spread minus credit collected (5-2.5). So let’s assume the stock tanks to $5, you give back the $2.50 you collected plus another $2.50. The probability of 50% profit on this is 66% (also a tasty trade target).
I like this trade. I’d put an order to sell the spread for $2.50 and if it executed put in a GTC to close it at 50% profit. (STC For $1.25...GTC).
Thanks for that. Generally speaking, have you found that generating metrics like this trade with POP P50 and ROC are numerous? Or does it take either mimicking the pros or lots of "digging" to come up with appropriate trades. Additionally, do you vary your trade strategies for diversity, or have you found your "comfort zone" by restricting the strategies you employ to just a couple?