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  • Oct 1 2024 at 7:49 am in reply to: How do you decide your selling and buying premiums? #150661
    ben005
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    Hi Teddi,
    Thank you for your response. I’m a bit confused. Is it possible to use the Put Options Selling Tool Analysis to determine the premium I should target?

    It might be easier to work with an example.

    Let’s use the information provided on this page.

    Below I have copied trade idea #2 from the page.

    Trade 2:
    For Oct 11 expiry selling the $820 put strike for $0.65 or more and buying the $775 or lower put strike for $0.10 or less to form a credit put spread. I plan to enter this trade. This trade is at the 84% rating.

    My question is, how do you decide ahead of time that you want to sell the PUT at “$0.65 or more” and not some other value?

    Best,

    Ben

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