Hosts Nick and Tony conducted a challenging What's Your Assumption session with five executions out of ten submissions as wide markets and poor liquidity forced multiple passes. The CMG laddered puts from AJ in LA positioned for choppy pre-earnings action using February 37.5 and March 35 strikes at $2.70 total, with Tony noting the stock's 30-60 range and decent 0.40 market correlation making it suitable despite his product hatred. The EMU 400-430 call ratio at $2.14 from Jack in Philly demonstrated price discovery as Tony started at $2.10 (mid $1.90) and got price-improved fill as stock rallied, with discussion of defensive adjustments if trade goes wrong (selling puts or put spreads without adding buying power). Multiple passes highlighted liquidity challenges including GDX ($2-wide markets on $86 stock), LRCX iron fly (February earnings with $3-wide markets), Lockheed Martin ($2-wide markets with single-digit volume), and AVGO 400-405 tight call ratio deemed "impossible" - Nick advocating for wider spreads versus tight $5 ratios. The session featured successful iBit laddered puts closure for $2 profit after overnight 8.5% Intel move, with Tony praising the "amazing" volatility and movement in Bitcoin options.

Hosts Nick and Tony conducted a challenging What's Your Assumption session with five executions out of ten submissions as wide markets and poor liquidity forced multiple passes. The CMG laddered puts from AJ in LA positioned for choppy pre-earnings action using February 37.5 and March 35 strikes at $2.70 total, with Tony noting the stock's 30-60 range and decent 0.40 market correlation making it suitable despite his product hatred. The EMU 400-430 call ratio at $2.14 from Jack in Philly demonstrated price discovery as Tony started at $2.10 (mid $1.90) and got price-improved fill as stock rallied, with discussion of defensive adjustments if trade goes wrong (selling puts or put spreads without adding buying power). Multiple passes highlighted liquidity challenges including GDX ($2-wide markets on $86 stock), LRCX iron fly (February earnings with $3-wide markets), Lockheed Martin ($2-wide markets with single-digit volume), and AVGO 400-405 tight call ratio deemed "impossible" - Nick advocating for wider spreads versus tight $5 ratios. The session featured successful iBit laddered puts closure for $2 profit after overnight 8.5% Intel move, with Tony praising the "amazing" volatility and movement in Bitcoin options.

Market participants should consider four key factors when structuring their first trade: directional assumption, implied volatility environment, timeframe, and risk profile (particularly Delta exposure).

Historical data shows markets generally trend upward over time, making bullish strategies attractive for beginners, though downside moves tend to be more severe. This creates a risk/reward dynamic where bullish strategies win more frequently but face larger potential losses during corrections.

Optimal trading typically occurs in the 45-day timeframe with 16-30 Delta positions, balancing gamma risk and extrinsic value. For premium sellers, high implied volatility rank (IVR) environments are ideal, while premium buyers benefit from low IVR conditions.

Delta serves as both probability approximation and price sensitivity indicator, a 30 Delta option has roughly 30% chance of finishing in-the-money at expiration.

Market participants should consider four key factors when structuring their first trade: directional assumption, implied volatility environment, timeframe, and risk profile (particularly Delta exposure).

Historical data shows markets generally trend upward over time, making bullish strategies attractive for beginners, though downside moves tend to be more severe. This creates a risk/reward dynamic where bullish strategies win more frequently but face larger potential losses during corrections.

Optimal trading typically occurs in the 45-day timeframe with 16-30 Delta positions, balancing gamma risk and extrinsic value. For premium sellers, high implied volatility rank (IVR) environments are ideal, while premium buyers benefit from low IVR conditions.

Delta serves as both probability approximation and price sensitivity indicator, a 30 Delta option has roughly 30% chance of finishing in-the-money at expiration.