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Market Measures

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Pros and Cons of 2SD Strangles

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.

When selling strangles, traders have several choices when deciding their short strikes. One popular choice is the 16 Delta put and call because this represents a one standard deviation move. What happens if we sell strangles at the two standard deviation mark?

Today, Tom and Tony discuss the pros and cons of selling two standard deviation strangles.