Market Measures

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Performance of 2 SD Strangles

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.

tastytraders are familiar with the performance of trading 1SD Strangles. So what about 2SD Strangles? Two Standard Deviation Strangles would (in theory) provide wider profit zones and higher probabilities of profit. Is this true from a historical perspective?

In this study, we compared the performances of 1SD and 2SD strangles, taking note of large losses, credit received, return on capital and win rate. The results are clear.

Watch this segment of “Market Measures” for the important takeaways on when (if ever) we should deploy these wide spreads.

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