/biz/ - Business & Finance

>>52881699
>I appreciate the discussion
kewl
>I just strongly disagree with you
no problem anon
Here's an example, pic related. It's a credit spread on SPY calls I just pulled up so let's do a rough expected value calculation. Delta on the short leg is 0.3085 and the max profit is $142. 1 minus 0.3085 is 0.6915 so multiply that by 142 and you get $98.193. The max loss is $358. Multiply that by 0.3085, the probability of the option expiring in the money and you get $110.443. If you do this trade 1000 times you will lose on average $12.25 per trade. That's the negative expected value I was talking about. It is this way on every option on every chain today and forever
>>52881849
indeed