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The One Number That Tells You Whether to Buy or Sell Options
by Blake Young
Every options trade starts with the same fork in the road. You can buy premium or you can sell it.
Get that decision wrong and it does not matter how good your chart read is. You will leave money on the table even when the trade moves in your direction.
I have a single number I check before I look at a strike price, before I pick an expiration, before I decide on a spread.
It takes five seconds to find and it tells me whether I should be buying options or selling them on any given stock.
On Monday I ran three setups across three different sectors. Dollar General had options priced in the 63rd percentile of their yearly range.
AbbVie sat at the 28th percentile. The Healthcare ETF came in at 29%.
Same market day. Completely different pricing environments.
Dollar General demanded a premium-selling strategy. AbbVie called for a long call spread.
The Healthcare ETF was a straight buy.
If you used the same approach on all three, you overpaid on at least two of them. Most traders do exactly that because they never check the number that would have told them otherwise.
P.S. I check one number before every options trade. But I check something else even earlier—Dark Wire beacons at 3AM that show me where institutions are positioning before the opening bell. That 12-hour warning is how I closed January at 18.5% trading just two hours a day. Tomorrow 2PM ET, I'll show you the overnight scans that make it possible.
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