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Market Measures

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How Bad Are Outliers in High IV

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.

On average, higher Implied Volatility does lead to higher P/L in short premium strategies on average.

More importantly, selling premium in low IV environments experience most of the outlier losses, making the case to stay small when IV is low, and increase size when IV is high.

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