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10 Reasons to be a tastytrader

Probability Never Lies

10 Reasons to be a tastytrader

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

In the fourth episode of the series, Dylan Ratigan and hosts tackle another imperative tastytrade pillar: probability never lies.

Buying stock is a 50/50 shot: the price goes up and a trader profits, or it goes down and a trader incurs losses. With options, traders are able to choose the price at which they buy or sell stock, ultimately improving their probability of profit. But can probabilities be inaccurate? And if so, how does that influence our trading success?

We like to sell option premium because we believe implied volatility is overstated, which allows us to collect a larger credit on trade entry, thereby improving our breakeven price and probability of making money on the trade (since the price of the stock can move against us slightly and we can still profit). Still, why sell premium when there are Wall Street "experts" who can tell individuals what to invest in? Dylan Ratigan recruits Mike, Frank and Ryan to assess the credibility of these pros and share their personal experience with high probability trading.

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