What makes the premium collection faster?

#1

Here’s a question that might help our iron condors. Sometimes when I collect a lot of premium ($100+ on both sides) it takes forever to actually collect it. Just before 2am today, the premium was $118 & $114. About 20 minutes later, it was down to $85/$85!!! My profit on both sides is really growing quickly. How come it takes forever for this to happen (sometimes not until after 9:30am) & other times it happens quickly??? It’s only 2:30am right now & the premium is really shrinking fast. It makes no sense. There’s no rhyme or reason. Why didn’t it do this last night??? Are they toying with us??? Mind games? Getting our hopes up & then killing them the next day?

#2

The premium is just pouring in!!! I’ll probably just T.P. before I go to bed.

#3

A lot of it has to do with implied volatility and also where the market is trading at the time.

Europe’s opening will generally have more of an effect on things, than say a random 12am trade.

Quite often I will see greater premium at 3am EST, than I did when I placed the trade earlier in the evening.

It usually takes so long to profit, because you are basically paying to make money.

Also keep in mind that even at 9:30am when the market opens, there is still just under 7 hours left on the IC and that will generally be the most volatile time for the US markets, so there will generally still be a lot of premium left.

Another reason to get out before opening if you have a decent profit :-).

#4

The trick is to not be greedy Bill. if you have over $30 profit b4 open take it. You would be surprised how that adds up over time if you do more than 1 contract on NQ. Or you can do 1 contract on all the indices with a daily goal of $80-$120. So that is $20-$30 profit on each b4 open.

And yea Matrix is right. It all depends on the implied volatility which changes when there is news coming. Like yesterday i was up on premium b4 2am and they reset the premium bcus of FOMC so i lost all the premium i had and the market didn’t go anywhere.

#5

Didn’t they already know about the FOMC when they originally set the prices? This is my problem. One day the market will be sitting still & I won’t collect any premium for hours. Another day the market will be sitting still, just like the day before, and the premium just pours in like nothing! They already know about the news events when they set the prices at 6pm.

#6

Yes they are aware of the news at 6 the night before, but may not always price it in that far ahead of time that big. The markets tend to react certain ways before big new events. Sometimes before events the markets stay flat, so therefore may not have big premium built in way way ahead of time. certain news events can get crazy ahead of time etc. All depends on the particular news event, timing of it, point at which IV changes etc

#7

sounds like a rigged market if they reset premium based off information thats already out.

#8

Yeah, it’s not fair for those who get in when the premium is around $90 & then it spikes an hour later to $115.

#9

apex will help us play the game, regardless of nadex being rigged.

#10

it is not that Nadex is rigged! This is standard , even with regular option, not just binary options. When volatility changes so does the price of optionality. At expiration your premium amount you bought into will not change. If you are trying to get out early with premium collection, then yes, this can have an effect. But big changes are and should be expected before major announcements like FOMC

#11

So I’m guessing they look at the “expected” numbers from the reports when they come in & then adjust their prices?

#12

The premium can change even before the reports come out based on the historical numbers, the history of does the market move or go flat a certain amount of time ahead of the news, when the IV changes before or after the release etc it can be based on several things. Just be sure to expect changes in premium when IV of options changes