3d • General Discussion
Possible play of the day
NFLX is the only stock where my indicators label it a strong go down. I tried that yesterday and it wouldn't drop. Right now, options are cheap on this. Im most likely entering a less used play (by myself). Going with a long strangle. This way, if IRAN gets crazy the volatility will go crazy and things will move hard.
Here is AI Response:
The Real Data Breakdown (50 DTE)
Scenario A: The Tight Strangle (88 Put / 92 Call)
- 88 Put: Costs ~$3.60 | Delta: ~43 | Theta: -0.041
- 92 Call: Costs ~$3.04 | Delta: ~42 | Theta: -0.040
- Total Capital Outlay (Max Risk): ~$664 per spread
- Combined Daily Theta Bleed: ~$8.10 per day
Scenario B: The ATR-Aligned Strangle (80 Put / 100 Call)
- 80 Put: Costs ~$1.13 | Delta: ~17 | Theta: -0.029
- 100 Call: Costs ~$1.09 | Delta: ~19 | Theta: -0.029
- Total Capital Outlay (Max Risk): ~$222 per spread
- Combined Daily Theta Bleed: ~$5.80 per day
The EV Verdict
Looking at the hard numbers from your terminal, the 80/100 setup is structurally and mathematically vastly superior for the geopolitical "Vega expansion" thesis you are trading:
- Capital Efficiency: The 80/100 strangle costs exactly 1/3rd the price of the 88/92. By widening the wings, you drastically reduce your capital at risk. If the VIX stays flat and the stock chops sideways, losing $222 is a highly manageable EV calculation. Losing $664 on a pure volatility play hurts.
- The Delta Question Answered: Look closely at the delta column for your 80 and 100 strikes. They are sitting at 17 and 19 Delta, respectively. This perfectly answers your previous question—yes, this is exactly the ~15-25 delta "sweet spot" where the options are cheap enough to leverage a volatility spike, but close enough to the money to trigger if the ATR bands break.
- The 50 DTE Warning (The Theta Curve): Because you selected the 50 DTE chain instead of the 135 DTE chain, your Theta decay curve is already steepening. Even on the wider 80/100, you are bleeding almost $6 a day just holding the position. If the Middle East catalyst doesn't trigger within the next 15–20 days, the time decay on this specific June chain will start accelerating aggressively against you.
The Professional Play: If you intend to use this 50-day chain, the 80/100 is the mathematically sound entry. It minimizes your footprint while keeping you perfectly positioned to capture the VIX expansion if the geopolitical fuse lights.
This came from the response on the morning report and then I did some additional research. Does anyone on here use options for long strangles?
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Possible play of the day
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