What is the purpose of the Percent to Double feature in Advanced Option Graph?
A common option trading strategy is to try to enter positions that might double your investment if the stock moves in your favor, and try to exit the position with less than the maximum loss if the stock does not move in your favor. Over time, doubling your money on 50% winners, and taking less than the maximum loss on 50% losers, will be a profitable outcome. The Percent to Double Feature shows you graphically where the “double” is, and what percent the stock needs to move by the expiration date to reach the double line. If you find a stock that is capable of moving 15% in a month, and the Percent to Double line shows that you can get a double if the stock moves 8%, then that might be a trade (for this type of trader) to look into. The Percent to Double line is not a prediction, it is just a graphical representation of a mathematical formula that answers the question “how much does this stock need to move in order for me to double my option investment?” Percent to Double lines can onl
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