In this Options in Action, Mike Butler reduces return on capital to a single filter: credit collected against the buying power you actually put up, not the theoretical max risk. His rule of thumb is 20 percent or better, and he shows why a high implied volatility product tends to clear that bar while a low volatility one usually cannot, using two names at very different prices to make it concrete.
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Chapters
00:00 What this series is
00:36 Return on capital, defined
01:33 Why max risk is the wrong lens
02:07 Buying power is what matters
02:44 Selling premium in a high vol name
03:29 The strangle version
03:54 The debit side alternative
04:13 Manipulating reward versus risk
05:23 The low vol name to avoid
06:44 Why cheap options suit debits
07:41 Bu...