After the 20% crash, I sold the Put option for UNH. Why? 😱
The previous few articles discussed.Options Discussed. Emotion~ An extreme and wonderful one is coming today.Extreme and wonderful.An example!
ps: (Large Cap $S&P 500 Index (.SPX.US)$ These past two days should be rather dull in the market, why not join me to look for individual stock opportunities!)
There are followers. $UnitedHealth (UNH.US)$Friends who have been paying attention recently should be astonished.
How could a long-term rising blue chip stock fall like this? Everyone is asking, 'How could this happen?'![]()
I only think:
Isn’t this panic an opportunity? How to make money from this wave of decline?
How could a long-term rising blue chip stock fall like this? Everyone is asking, 'How could this happen?'
Isn’t this panic an opportunity? How to make money from this wave of decline?
I don't chase rebounds, nor do I bet on big bullish candles, I only do one thing:
When others are emotionally collapsing, Sell the panic they hold.
UNH has recently been on a downward trend.![]()
, why do I still dare to Sell PUTs? (4 reasons, the first is the key~)
1. [Key Point] The premium for the Put is outrageously high; what I am selling is "emotion rather than price".
When the market is calm, UNH at 263, the 230 Put should be around ~$0.70.
But because volatility skyrocketed, I sold it.$5.30！
→92% of it is market panic premium.
→92% of it is market panic premium.
What I do is not betting on direction, but rather:
Using Sell Put to take advantage of volatility + the money from time value contraction.
Using Sell Put to take advantage of volatility + the money from time value contraction.
2. The annual line first tests EMA20, with clear technical support.
UNH is a typical large-cap stock.
The annual EMA20 line has been touched for the first time, technically a strong support.It is a buying point for many long-term funds.
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The decline method is extreme, and the price action structure shows a turning point.
The continuous daily Candlestick shows a slight decline + extreme sharp falls in the past few days, with a large bearish Candlestick 'crashing down,' limiting the rebound space (⚠️.This is not a suitable place to buy Calls, because the premium for calls is also very high, and without sustained upward movement, it is easy to lose money, and the probability of a V-shaped reversal is low.)
The red circle indicates a real drop ~ the yellow circle typically represents the release of panic emotions ~![]()
In price action theory,The most common occurrence after this type of movement is a trading Range (consolidation).![]()
4. Daily emotional extremes released, the probability of a rebound increases.
Increased volume, oversold, and serious deviation from moving averages.
After the emotional release, it usually leads to a 'calm recovery'.
Of course, it is necessary to see if the Candlestick shows signs of a rebound ~ You can refer to the smaller time frames, the 15-minute Candlestick and the 1-hour Candlestick have already shown signs of a rebound!
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Do not bet on the height of the rebound, only bet that it will not continue to plummet; Sell Put is to earn "other people's fear money" in the cheapest way when the market is in panic.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Sherry111
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105540561 : So how is the market panic premium IV evaluated? Each stock is different, right?
yokim : So wait... you make money when people panic? Explain like I’m holding a bag of UNH and crying rn
Keiith : Everyone else is Googling 'how to survive a market crash' and this dude is selling puts and pocketing $11K
Sherry111 OP 105540561 : Yes, each ticket is different, refer here to see the recent surge in volatility.
Sherry111 OP 105540561 : Your question is very good!
Sherry111 OP yokim : I'm not an investor, I am just a day trader... I believe you have your reasons for investing in UNH ~ I'm not very familiar with the fundamentals of this stock, I am just doing a short-term trade, and I hope you can make money in the end.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
BuyLiaoBro : great infos!
Ad astra et somnium : If something big happens today, you might suffer a margin call.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
There should be better methods besides naked selling puts.
Sherry111 OP Ad astra et somnium : 1. Observe the trend. If it continues to fall, you can choose to cut losses. 2. Even if you don't want to cut losses, you can choose to buy the underlying stock at 230, which is also a quite good price. Naked calls are more likely to get liquidated.
Ad astra et somnium Sherry111 OP : enen
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