Market Measures

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Probability of Touches

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.

We typically discuss what happens to our trades at the management points. But today, we discuss what happens during the trade.

This segment of Market Measures looks at when and how often put and call strikes are touched in strangles.

We can use approximations for the probability of touch on given strikes to see how often we expect a strike to be touched. Based on the study, puts were touched less often than calls. However, puts were touched sooner than calls.

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