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Pumpedkin Spice Premium | Rich Options

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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 selling premium, we always want to take advantage of high Implied Volatility (IV) and high IV Rank. This allows us to get further away from the at the money strikes for the same amount of credit or collect a larger amount of credit if we want to use the same strikes. This is most clear when we are trading naked options such as a Strangle but can also be seen when trading spreads. Since smaller accounts are unable to trade naked options, Tom Sosnoff and Tony Battista highlight the importance of a high IV Rank using spreads. Today, the guys show you the amount of credit that you can receive when an underlying is at the same price, with approximately the same days until expiration and the only difference being IV and IV Rank. They clearly show why waiting for high IV is better whether you are trading naked options or using spreads to define your risk!

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