The 16 Delta vs 25 Delta Question, Answered Right

Most premium sellers pick a strike by its delta, using it as a proxy for the odds the option expires worthless. Tom Preston shows where it breaks down. A 16 delta put collects less credit with a lower chance of finishing in the money; a 25 delta collects more but risks more. Which is better? You can't answer on delta alone, because volatility reshapes the whole distribution of outcomes. He walks the bell curves to show why implied vol is part of the call. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 How traders use delta to pick strikes 00:35 Delta as a probability proxy 01:00 The 16 delta versus 25 delta example 01:45 Less credit, lower probability 02:30 Which strike is actually better? 03:00 Why you can't ignore volatility 03:40 The two normal distributions 04:30 How vol reshapes the odds 05:30 Putting delta and vol together 06:30 The takeaway on strike selection #tastylive #cherrybomb #tompreston #delta #impliedvolatility #sellingpremium #strikeselection #optionsforbeginners #optionstrading #stockmarket tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.