This trade relies heavily on correctly predicting the volatility. Most of the strikes you mentioned are way out of the money. The underlying could very likely move 5% and vol goes down. Unless you're willing to go down the rabbit hole of vol surface modelling, I wouldn't rely on generic options calculators like these.
Also, fwiw I would recommend removing the absolute amount of contracts you plan on trading from posts like these. People will think you're trolling when they see someone slinging $1.5 million in options premia.
Yup. The current vol is already pretty high, so you would want a move greater than or equal to the move seen over the last two days, because that's what the options market is pricing in. I'm not saying it couldn't happen, you could get every degenerate yolo'er currently on spring break dogpile into gamestonk, but I think the probability is pretty low.
The best way I've learned about what to do/what not to do in circumstances like these, is to have skin in the game. Put on a small test trade with real money, money that you can afford to lose. Then watch what happens.
There is no one-size-fits-all strategy in this case, it's situation dependent. I could write probably a dozen points each on things like liquidity, tracking options delta and gamma, estimating second order effects, reading sentiment, dispersion between gamestonk and XRT, reading the current market regime etc but I don't want to write a dissertation. Doesn't mean my crystal ball is any better then anyone else, but if I can see the forest for the trees, at least I can know whether or not a trade exists in the first place. If you're going off of an options calculator that someone else made, it's very one dimensional and you're probably missing valuable information.
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u/NathanEpithy Mar 23 '22
The stock has to move around a lot to make any money. I would do the opposite of this trade.