In the past few weeks, the SPX has made 165 pts move and has blown through its upper limit of the expected weekly price range. This kind of movement highlights the weakness in the option model. The option model predicts that 68% of the time, SPX should trade within its forecasted range. I am going …
The size of your trades relative to the amount of capital in your trading account is critical to the success of a trader or investor. The difference between a successful trader or investor, and a losing trader or investor can be summed up to the size of the trade relative to the value of your …
MANAGING AND PROFITING FROM DELTA, VEGA, THETA, GAMMA RISK THE ‘GREEKS’ RISK MANGEMENT GRID Line Max Profit? * VEGA POSITION DELTA POSITION Max Profit? * PORTFOLIO BIAS** 1 Down ← Long Vega Short Delta → Down BEARISH 2 Up ← Short Vega Short Delta → Down NEUTRAL 3 Down ← …
As the market changes, I will use one follow strategies to keep my account growing. Strategy Conditions Duration Strategy Adjustment Risk Areas Probability Factors Technical Factors Strategy Tool Black Butterfly (BB) Express Expiration Front Week Layer on a CALL or a PUT Black butterfly if more than 4 day remaining. Adding Risk with second butterfly …
Conversion & Reversal Arbitrage takes advantage of pricing differentials between the PUTs and CALLs. For example, a covered CALL position is synthetically the same position as a short PUT. If the short PUT is trading at a higher premium than the covered CALL, and the trader can obtain a more substantial credit by selling PUT, …
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