Two Identical Losses. One Came Back 90% of the Time, One 20%

A loss is a loss, right? Not according to ten years of data. This segment isolates short strangles that hit a full one times credit loss and sorts them by what caused it: a breach on the call side, a breach on the put side, or a spike in volatility with neither strike touched. The recovery rates are nothing alike. In the cases studied, losses caused by a volatility spike recovered before expiration roughly nine times out of ten and tended to appear early in the trade. Put-side breaches came back around half the time. Call-side breaches, the most common source over a decade of rising markets, recovered only about one time in five, though they carried the mildest tails. The desk also explains why they shift an entire tested position higher rather than leaving a short call exposed. Historical results, and management would change them. This is education, not a recommendation. 📊 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 Looking at some numbers today 00:33 What counts as a one times loss 01:12 The test parameters 02:36 What causes these losses 03:48 Why volatility hits early 05:04 Recovery rates by source 06:22 Rolling the whole thing up 08:11 Why 15 days to expiration 09:35 Tail risk by category #tastylive #optionstrading #strangle #impliedvolatility #riskmanagement #shortpremium #optionsresearch #tailrisk #spy #optionseducation 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.