Unveiling the Hidden Risks of the 112 Options Trading Strategy

In our latest video, we embark on a journey to uncover the hidden risks of the 112 options trading strategy. This often-misunderstood strategy, known as a Put front ratio spread, holds complexities that demand thorough examination. Join us as we delve deep into its mechanics and explore the risks that often elude public awareness.

Our analysis takes us back to the tumultuous period of the Covid market crash in 2020, providing a comprehensive understanding of the 112 strategy’s performance under extreme market conditions. Through meticulous backtesting, we unearth shocking insights into its behavior during times of crisis.

Within the video, we navigate the intricate landscape of Vomma, Vanna, and Lambda – Greek positions integral to the 112 strategy’s dynamics. Discover how these factors wield considerable influence over trade outcomes and contribute to heightened buying power requirements. Witness firsthand the potential repercussions, with buying power surging up to 20 times during market crashes.

Real-life examples paint a vivid picture of the pitfalls associated with the 112 strategy. From receiving margin calls mere days into the Covid crash to witnessing entire accounts implode within a week, the risks are starkly apparent. Consider the staggering losses of $1.3M on trades aiming for a modest $6,000 credit – a stark reminder of the strategy’s unforgiving nature. As buying power requirements soar from $70,000 to over $400,000 amid a $1.3M loss, traders find themselves exposed to significant financial jeopardy.

Join us for this eye-opening exploration of the 112 options strategy’s risk-adjusted returns. Arm yourself with valuable insights to safeguard your investments in volatile markets. Don’t miss out on this opportunity to enhance your understanding and protect your financial future.