Market Measures

Monday – Friday | 9:00 – 9:20a CT

Short Calls: Fading the Highs

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Tom and Tony take a look at new research selling the high 30 delta calls at all-time highs or 52-week highs in the market.

The study looks back from 2005 - 2017 and analyzes 3 different management tactics:

  • Managing at 50% of Max Profit
  • Managing for 2x Loss
  • 50% of Max Profit OR 2x Loss, whichever came first

All trades that didn't hit the specified target were held to expiration.

The results are extremely interesting and serve to validate managing winners but not necessarily managing losers.

Tune in for Tom and Tony's full rundown and all the results.