S&P 500 (US 500) Daily Binary
bought May 18 at 12:22 p.m. New York time with a debit
and expiring May 18 at 4:15 p.m.
With the price at $2,126.92, implied volatility stands at 12.8% with 230 minutes remaining before expiration.
|Week||SD1 68.2%||SD2 95%|
Ideally, I want my strike price on the contract to be beyond the one standard deviation range. However, Nadex normally has just a couple of strikes on the board, so that possibility wasn't available to me. I took the risk anyway, leaving 0.13% of the lower end of the range outside of the profit zone.
Shares rose by 0.11% during the lifespan of the position, or a 241% annual rate. The options position produced a 52.0% yield on debit, for a +117,301% annual rate.
-- Tim Bovee, Portland, Oregon, May 18, 2015
My volatility trading rules can be read here.
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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.License
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