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David Janello's avatar

The 5.00 strike options do not necessarily imply a move to zero in the stock, they also serve as a low cost hedge for traders selling premium at higher strikes . Also, the bottom leg frees up margin under RegT (retail) and JBO (market maker) rules.

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David Janello's avatar

BTO COIN 5 strike Puts exp Sept 15 2023 1x0.15, 4x0.18

exch EDGX

Trade Preview: 5 point move down in very near term pushes this option up 88% to 0.32 if implied volatility remains constant. This is much higher leverage than nearby strikes and expirations.

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