Ever wondered if the seemingly lucrative 112 and 111 options strategy is truly the golden ticket to consistent profits, or if there’s more to the story? Today, I want to share some crucial insights about the 112 and 111 options strategy that I’ve learned through my own experiences in the market.

Understanding the Profit and Loss Graph

One aspect often overlooked in the 112 and 111 options strategy is the profit and loss graph. Sure, the profit at expiration might look promising, but what about the journey to that point? The Orange Line on the graph reveals how your profit or loss evolves throughout the trade’s lifetime. This is vital information because, in reality, market fluctuations can impact your position significantly before reaching the expiration date. Being aware of this can save you from unexpected losses.

Impact of Volatility on Your Trades

Volatility is a key player in options trading, and its role can’t be underestimated. When the market drops, volatility tends to increase. This can be a double-edged sword for your trades. The Orange Line on the profit graph may take a hit due to heightened volatility, resulting in losses even before reaching the profit potential at expiration. To mitigate this, consider entering trades when implied volatility (IV) is high and be cautious when IV is low, as rapid increases can amplify your losses.

Implementing Effective Hedges

One effective strategy to protect your positions is to incorporate hedges. By structuring your trades with hedges, you create a safety net that offsets potential losses. This can involve removing short puts, adding downside hedges, or strategically closing certain positions. Keep in mind that effective hedging requires careful planning and monitoring, but it can significantly enhance your risk management and overall trading success.

112 or 111 Options Strategy

The 112 and 111 options strategy can be a powerful tool in your trading arsenal, but it’s not without its challenges. Understanding the intricacies of the profit and loss graph, the impact of volatility, and implementing effective hedges are essential for navigating these trades successfully.

Remember, there’s no such thing as free money in the market, but with knowledge and careful planning, you can tilt the odds in your favor.

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Thanks for reading 🙂
Austin Bouley
CEO & Chief Strategy Officer