In this video Tom and Tony compare short premium options trades against previous shows. In this video they compare and at the money straddle, the Jade lizard, and a broken wing butterfly.
For purposes of this study, the following were used:
- EWW, GLD, IWM, SPY, & TLT
- Five years
- Trade on first day of every month
- Implied volatility over 50%
the outcome of the study shows that the Jade lizard that a total profit of $5342 and a total number of wins at 93%, or 65 out of 70. The biggest loss was only $201. The other competitive option trade was the straddle which had a profit of $14,423. However, the margin required was over twice as much in the biggest loss was $1009.
If you compare the Jade lizard with the margin requirement, the profit is roughly the same as the straddle, with the lower biggest loss and increased percentage of wins.
You can watch the video, “comparing high IV option strategies” by tastytrade.com at the following link:
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