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I am teaching A pretty girl how to sell baba strangle options she owns 100 of the shares given by her father

As an options trader, one of the strategies you can use to generate income is by selling a strangle option. A strangle involves selling both a put option and a call option on the same underlying stock with the same expiration date but with different strike prices. The goal of this strategy is to profit from the premiums received from selling the options while limiting the risk to the difference between the strike prices of the options.

In this scenario, the underlying stock is Alibaba (symbol: BABA), which is currently trading between $80 to $100 per share. Your goal is to teach and impress a pretty girl of your dreams on the trading strategy using selling strangle for Alibaba. Additionally, the girl already owns 100 shares of Alibaba.

To implement the selling strangle strategy, you need to sell a put option with a strike price of $70 and a call option with a strike price of $100, both expiring in 6 months. The put option is currently trading at $2.50, while the call option is trading at $14.30.

Selling the put option means that you are willing to buy 100 shares of Alibaba at $70 if the stock price falls below this level. By selling the put option, you receive a premium of $2.50 per share or $250 for the 100 shares. If the stock price remains above $70, the put option will expire worthless, and you get to keep the entire premium received.

Selling the call option means that you are willing to sell 100 shares of Alibaba at $100 if the stock price rises above this level. By selling the call option, you receive a premium of $14.30 per share or $1,430 for the 100 shares. If the stock price remains below $100, the call option will expire worthless, and you get to keep the entire premium received.

The maximum profit you can earn from the selling strangle strategy is the total premium received, which is $1,680 ($250 from selling the put option and $1,430 from selling the call option). To achieve this maximum profit, the stock price must remain between $70 and $100 at expiration. If the stock price remains within this range, both options will expire worthless, and you get to keep the entire premium received.

However, the selling strangle strategy also has a potential downside risk. If the stock price falls below $70 or rises above $100 at expiration, you will be obligated to buy or sell the shares at the respective strike prices. In this case, you would lose money on the trade because the market value of the shares would be different from the strike price.

Since the girl already owns 100 shares of Alibaba, you need to factor in the potential risk of having to sell her shares at $100 if the stock price rises above this level. If this happens, she would miss out on any further upside potential in the stock. Therefore, it is important to consider the potential risks and rewards of the selling strangle strategy before implementing it.

I am teaching A pretty girl how to sell baba strangle options she owns 100 of the shares given by her father

As an options trader, one of the strategies you can use to generate income is by selling a strangle option. A strangle involves selling both a put option and a call option on the same underlying stock with the same expiration date but with different strike prices. The goal of this strategy is to profit from the premiums received from selling the options while limiting the risk to the difference between the strike prices of the options.

In this scenario, the underlying stock is Alibaba (symbol: BABA), which is currently trading between $80 to $100 per share. Your goal is to teach and impress a pretty girl of your dreams on the trading strategy using selling strangle for Alibaba. Additionally, the girl already owns 100 shares of Alibaba.

To implement the selling strangle strategy, you need to sell a put option with a strike price of $70 and a call option with a strike price of $100, both expiring in 6 months. The put option is currently trading at $2.50, while the call option is trading at $14.30.

Selling the put option means that you are willing to buy 100 shares of Alibaba at $70 if the stock price falls below this level. By selling the put option, you receive a premium of $2.50 per share or $250 for the 100 shares. If the stock price remains above $70, the put option will expire worthless, and you get to keep the entire premium received.

Selling the call option means that you are willing to sell 100 shares of Alibaba at $100 if the stock price rises above this level. By selling the call option, you receive a premium of $14.30 per share or $1,430 for the 100 shares. If the stock price remains below $100, the call option will expire worthless, and you get to keep the entire premium received.

The maximum profit you can earn from the selling strangle strategy is the total premium received, which is $1,680 ($250 from selling the put option and $1,430 from selling the call option). To achieve this maximum profit, the stock price must remain between $70 and $100 at expiration. If the stock price remains within this range, both options will expire worthless, and you get to keep the entire premium received.

However, the selling strangle strategy also has a potential downside risk. If the stock price falls below $70 or rises above $100 at expiration, you will be obligated to buy or sell the shares at the respective strike prices. In this case, you would lose money on the trade because the market value of the shares would be different from the strike price.

Since the girl already owns 100 shares of Alibaba, you need to factor in the potential risk of having to sell her shares at $100 if the stock price rises above this level. If this happens, she would miss out on any further upside potential in the stock. Therefore, it is important to consider the potential risks and rewards of the selling strangle strategy before implementing it.

In conclusion, the selling strangle strategy can be a profitable options trading strategy if executed correctly. However, it is important to fully understand the potential risks and rewards of the strategy before implementing it. Additionally, it is important to consider the impact of the strategy on any existing positions, such as the girl's 100 shares of Alibaba

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