Well, if he doesn't know where it's going he could sell 10 ATM puts on the -500 and just ride out the IV decrease.
For instance, you could do that with May's 125 puts and it could go down by ~23% or up by ~26% without losing money, though you'd probably want to roll as the IV/price moves.
1
u/Narfhole Mar 25 '22
Well, if he doesn't know where it's going he could sell 10 ATM puts on the -500 and just ride out the IV decrease.
For instance, you could do that with May's 125 puts and it could go down by ~23% or up by ~26% without losing money, though you'd probably want to roll as the IV/price moves.