This strategy mentioned in video is called a front spread. By adjusting the strikes after the move in $NVDA, it remains a viable strategy, especially with NVDA's implied volatility still elevated. For a more detailed explanation, check out #OGTV Episode 238 in my X.com feed.

OGTV | Trading VIX Derivatives w/ Russell Rhoads | 8.26.24 Join us as Russell Rhoads, PhD, CFA, & I explore VIX index seasonality, popular option strategies, and live trades with real-time VIX options. youtube.com/live/8nwfNAy_M18…

Trading VIX Options: A Different Beast - AI Summary @tradier In a recent market update, discussions centered around the possibility of a significant interest rate cut by the Federal Reserve. While some speculated a 50 basis point cut in September, others believed it should have happened in July, especially since other central banks, including Canada’s, had already cut rates. Trading Volatility: VIX and VVIX Attention then shifted to trading the VIX and VVIX. The strategy involves selling premium when volatility is high, as higher implied volatility makes butterfly options cheaper. The goal is to put on a butterfly trade when implied volatility is high and hope for it to decrease afterward. Short-Term VIX Trading For short-term trading, the August 7th expiration was chosen, despite its volatility. VIX options don’t trade based on the actual VIX index but on futures. For instance, with the VIX at 29, the option prices indicated a market expectation closer to 26. The strategy aimed to capitalize on this by predicting the VIX would drop from 36% back towards 20 or lower within five days. The Trade Setup The trade involved a 55-cent premium paid for the 1x2x1 modified put butterfly, wanting the VIX to settle around the 22 area. The potential profit was $245 if the VIX landed on 22, with a controlled risk of $55 max loss. Risk Management The trade was structured to minimize risk. If the VIX rose, the maximum loss was $55, but if it dropped below 20, a profit of $55 was still achievable.

Amazon Earnings Options Strategy @tradier @eWhispers Amazon.com, Inc. ($AMZN) is set to announce its earnings after the close on Thursday, August 1st. On Wednesday’s Options Guy TV hub.tradier.com/shows/option… (#OGTV), we explored a strategy to take a bullish stance on the company using options. Given the timing, a modified butterfly spread with calls is particularly appealing. We will adjust a standard butterfly by making the width of the short call spread smaller than the long call spread. This adjustment ensures profitability even if AMZN surges. What’s a butterfly you ask? A butterfly spread is an advanced strategy involving the purchase of a call at a lower strike, selling two calls at a middle strike, and buying another call at a higher strike. Learn more about the standard butterfly with calls at OptionsPlaybook.com: optionsplaybook.com/option-s… Why Modify? By narrowing the width of the short call spread relative to the long call spread, the adjustment adds a small cost, increasing the maximum loss potential. However, this modification allows the butterfly to remain profitable if Amazon's stock price rises significantly after the announcement. Why This Strategy? Given that the earnings announcement is on a Thursday, the options used will have only one trading day to expire (#0-DTE). The key advantage of using a butterfly spread in this scenario is its cost-effectiveness and the fact that a drop in implied volatility and a high rate of time decay will benefit the butterfly if the forecast is correct, which both are probable due to the known news event and the use of 0-DTE options. This setup offers defined risk and substantial reward if Amazon's stock price converges around the middle strike price at expiration. The risk is limited to the net premium paid for the entire spread. Summary A modified butterfly spread with calls is a compelling strategy to use around an earnings report with 0-DTE option contracts. Its cost-effectiveness and short time to expiration make it a fitting choice for a bullish stance on $AMZN. Now you just need the bullish forecast to be correct—smile. Strategy Overview AMZN closed on 7/31/2024 at $186.98 Buy 1 (8/2) 195 Call Sell 2 (8/2) 205 Calls Buy 1 (8/2) 210 Call The midpoint of the modified butterfly spread closed at $1.69 net debit or $169. Max Loss: $1.69 or $169 Max Gain: $8.31 or $831 This assumes the execution of one 1x2x1 Modified Butterfly Spread at the midpoint.