Yield and Price Gap: The Two Most Important Numbers on an Opportunity Card
Two Numbers, Each Guarding One Thing
The redesigned Live Opportunity cards added two fields: Yield and Price Gap. Many people glance past them straight to the annualized number—but these two are the real core of the card.
Yield What the trade actually earns you—the premium as a share of your capital commitment (the assignment obligation).
Price Gap How thick your safety margin is—the distance from the current price to the strike, in percent.
In one line: Yield is about return; Price Gap is about survival.
Why Annualized Alone Isn't Enough
Annualized return has a built-in deceptiveness: it compresses both time and distance. Compare:
| Contract | Ann. Return | Yield | Price Gap | Days Left |
|---|---|---|---|---|
| SOXL $80 Put | 68% | 0.6% | 8.2% | 3 days |
| SOXL $65 Put | 16.8% | 0.4% | 30.4% | 7 days |
The first card shows 68% annualized—tempting. But the price gap is only 8.2%, and for a 3× leveraged name like SOXL, an 8% swing in a day is routine. The annualized number is high because there are only 3 days left—the time denominator is tiny.
The second shows "only" 16.8% annualized, but a 30.4% price gap—SOXL could lose a quarter of its value and you'd still be safe. Cross-check the backtest matrix: the historical 1-week non-assignment rate at 30% OTM is 99.3%.
These two trades live in completely different risk worlds, yet someone watching only annualized return would file them in the same folder.
Reading the Two Numbers Together
| Combination | Profile | My Take |
|---|---|---|
| High yield + high price gap | The ideal setup—rare | Prioritize for estimation |
| High yield + low price gap | Dancing on a knife's edge | Skip unless you have a specific thesis |
| Low yield + high price gap | Safe but capital-inefficient | A good home for idle cash |
| Low yield + low price gap | Neither side wins | Skip outright |
Don't Forget the News Rail on the Right
This upgrade brought another easily overlooked change: every card now comes with related news.
The use is very practical: a suddenly narrowing price gap or a suddenly spiking yield usually corresponds to a news event. The numbers tell you "what happened"; the news tells you "why." Spend 30 seconds scanning the right rail before opening a position, and you'll dodge most of the "looks beautiful" traps.
The Quick Pre-Trade Checklist
- Price gap ≥ my minimum OTM red line? (The one you set in the Risk Control Hub)
- Is the yield worth this price gap? (For the same cushion, is anyone paying more?)
- Any event in the right-hand news rail I haven't digested?
- Does the earnings date fall before expiration? (If yes, skip)
