Is selling options only way to profit from collapsing IV

[Guest]

As I see VIX has spiked.

But all straddles  and calendars too have jumped. e.g FDX.

 

What is the max reward strategy if FDX climbs back to 170 with IV coming down ?

 

I dont like to sell premium i.e put spread as it is only premium selling strategy, it does not get me the delta gains from 150 back to 170.

I want to capture the 20 point delta gain with collapsing IV.

 

What strategy comes close ?

[Guest]

Well may be FDX is not the best stock to sell premium as its low IV stock. How about  ULTA or some other IV stock. 

Can I sell premium as well as collect delta gains ? while being postive theta 

[Guest]

Most straightforward is probably a butterfly with the middle strike at your target price.

[Guest]

Butterfly is again premium selling

So will have to wait till expiry

I think i cannot use premium selling to get gamma gains

[Humble]

Selling strategies like condors, flies etc. are usually gamma negative. So they obviously won't benefit from big move.

[Guest]

Thanks

That was my conclusion

You cannot get paid to play

[Guest]

Selling strategies like condors, flies etc. are usually gamma negative. So they obviously won't benefit from big move.

 

Kim,

 

What option selling strategy do you think will provide the best reward to risk ratio if the stock crosses 20 points by sept expiration FDX ?

I obviously cannot be buy gamma now that options are expensive.

[Guest]

If i buy fdx today for gamma gains due to high iv

How can i hedge against iv crash ?

I may loose say 30% if iv starts coming down to normal and stock not moving at all which will be rare but worst case scenario

So how much should i spend on iv hedge and how ?

Thanks

[Guest]

We have several trades but i dont know which one will benefit most from iv coming down and hedge the straddle