Navigating the POP/Credit Exchange

Possibly the most classic <a href="https://ontt.tv/4FBS2">gimme-gotcha exchange</a> in all of options trading is that of probability-of-profit (POP) and credit collected. Simply put, if you want a higher POP, you must be willing to accept a lower credit, and if you’re willing to accept a lower POP, you will be rewarded with a higher credit. Fair enough, but how do we use this relationship to match our risk tolerance as traders? For traders that might be more conservative and risk-averse, we offer up an approach to <a href="https://ontt.tv/2QGnBFJ">defined-risk strategies and undefined-risk strategies</a> that could be worth consideration.