Options Jive - December 14, 2020 - Estimating Potential Losses with BPR

Published: Dec. 14, 2020, 1:40 p.m.

We often use buying power reduction (BPR) as a rough estimate for the worst-case potential loss associated with an undefined risk trade. Is this a good estimate? How often do realized losses actually exceed BPR? Join Tom and Tony as they discuss some statistics around strangle P/L and how it relates to BPR.