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A strangle in Hood with 80 strike put and 115 strike call for about 240.
The speaker discusses the difference between a straddle and a strangle, noting that a straddle involves buying or selling both a call and a put with the same strike price and expiration, while a strangle involves buying or selling calls and puts with different strike prices. The speaker also mentions the risk profile of each strategy, particularly in the context of natural gas trading.
If you're in the front month of September, you might look to go out to October.
The speaker notes that the volume is often low and the bid-ask spread is wide, which can make the strategy uncomfortable. However, the speaker suggests that the strategy is more viable on highly liquid markets like SPX, where spreads are tighter. The speaker also emphasizes the importance of trading the active month and avoiding markets with zero volume.
Yes, there is a significant benefit to rolling to the next month with 21 DTE in a perpetual S&P put selling strategy. This allows for continued exposure to the market while maintaining a reasonable time to expiration, which can help manage risk and optimize returns.