It's more than a motto; it's a way of life on "Options Action." We like to risk less to possibly make more. And last week, Dan Nathan - chief options strategist at Phoenix Partners Group nailed it with Intel . He bought the October 19/21 risk reversal, selling the Intel October 19-strike put for $0.15 and used that money to buy the slightly out-of-the-money October 21-strike call for $0.30, net net, paying $0.15 for a structure that would get him long at two points, $21.15 and $19.15.
"Worst case scenario, you get long down 5%. Most the news was out there. That's a good risk-reward," said Nathan.
Overall, the strategy is a decidedly bullish trade intended to take advantage of a sharp move higher.