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Market Measures

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Loss Recovery Analysis

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.

When incorporating high probabilities in an options trading, the losers on average are greater than the winners. With this in mind, tastytrade's research team examines the "Loss to Premium Ratio" and what it has looked like historically.

Study
  • SPY
  • 1 SD Strangles
  • 2005 - 2019
  • 45 Days-to-Expiration
  • Held-to-Expiration
  • Recorded losing occurrences only
  • Recorded the Loss to Premium Ratio
Results

The worst Loss to Premium Ratio occurrences happened in 2008, 2011, and 2018. But how long did it take to recover simply by using a strangle? Tune in to find out!

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