/biz/ - Business & Finance

>>23883232
>>23883331
*pic related

whether the premiums are worth it for the insurance is another discussion entirely. IV is high and can make those premiums too expensive, but IV is high in the first place because big price movements are expected soo up to you

>>23771368
>But what would you do when you're forced to exercise your options because the price dropped severely? You have a 5% loss.
be happy that your losses was capped at 5% instead of the severe 30% crash

insurance isn't free. You paid that 5% to hedge against it, worst case scenario it wasn't needed but you can also just be a millionaire if you always had godly timing
Best case scenario the price moons because the catalyst (e.g. earnings) turned out to be positive instead

the premiums are so expensive in the first place because all this crazy price movements (volatility) are being factored in. Figure out yourself if it's worth it on a case-by-case basis