Sep 22 2020 10 mins 8
Short premium traders benefit from the time decay of an option’s extrinsic value (+Theta), but risk potential losses from exposure to changes in IV (-Vega). A trade with a high initial profit potential has a high Theta for the amount of Vega risk at the time the trade is placed. Join Tom and Tony today as they take a look at these risk factors for 16Δ SPY Strangles in different IVR environments.
