[ben005]

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

[Author]

Posts