is this a legit trading strategy?

Discussion in 'Trading' started by IronFist, Mar 10, 2021.

  1. Find stocks that go parabolic out of nowhere, like SNDL. I am not using software that allows me to copy and edit pictures now so I can't post them, but look at SNDL.

    Then, after they go parabolic, buy puts between the spike and the previous range.
     
    aaronpena likes this.
  2. Not sure why that would not work...
     
  3. OP I would suggest being careful on who you take advice from

    Some people in this thread are about to blow their acct up.
     

  4. lol at me blowing out my account with such a small position. Come on man, quit trolling.
     

  5. If that were true cutting at 15k would not have been a problem considering your premise was wrong. LOL @ that.
     
  6. Why wouldn't it be neat?
     
  7. MrMuppet

    MrMuppet

    I would have a look at put IV first to determine if it makes sense to buy these. During moves out of nowhere put IV also spikes so you would lose a lot more from an IV crush that you'd make with delta.
    Be careful.
     
  8. I second that!
     
  9. spectastic

    spectastic

    yep during parabolic moves, premiums are highly inflated due to high volatility. the market will be pricing in downward move already, so skew will be crazy. your better bet is put spreads, which are pretty much vega neutral. even then, you might run into dead cat bounce, the option chain may be super illiquid that make it hard to get good fills or get out when you need to.
     
  10. Dustin

    Dustin

    You mean like this? Naw...can't work.

    [​IMG]
     
    #10     Mar 10, 2021
    LiquidMike likes this.