all pronouns are made up , silly <| sep |> The old frog in the blender <| sep |> I know what I ' m looking for I ' m just curious about all aspectsIf you ' re not going to assist why bother talking to me <| sep |> Volatility 5 this is not IV , or HV , this is just a measure of how much you assess the security to move based on historical data such as Average True Rangethis is a super fucked up way to assess volatility risk with options , mostly because it makes no sense . Option risk is not derived from ATR . Risk allocation 20 shares . You ' d put in a stop loss at 5 below your entry price . If the price moves against you by at least 5 , you exit the position , your realized max loss should be 100 barring crazy events . So according to your assumptions , you ' re entering with a directional delta risk of 20 ? Do your actual market greeks reflect this ?