Options Jive

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Strangle Deltas

Options Jive

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

This segment of Options Jive takes a closer at the purpose of referring to strangles by their delta.

We like to refer to strangles by their delta because delta approximates probability. If we have a 16 delta strangle, we theoretically have a 68% of making a profit (100 - 32*2).

Also, we have found that a 16 delta strangle auto-adjusts how far OTM it is based on volatility, stock price, and duration.

Therefore, delta standardizes volatility, premium, and duration to reflect your probability of success.

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