Day trading Options (best option?)
- Thread starter tradingpoker
- Start date
Cold you recommend a concise info source to investigate this question?
Yes,3rd edition of "Options made Complicated" by NewWurldDmn
The abridged version is only 3500 pages.
Lol....why didn't I think of that
you were busy thinking about stochastic vol models that incorporate jump diffusion’s.
How many hours would you say that or an effective course of action would require from a trader just walking in the options door that day trades well of off stock and etf PA action that has a successful track record when applied to the stock's 5minute charts themselves and the day-trader's new intent is to work the setup triggers using weekly options to be held for a range between 20minute to 60 to maybe the rare 240minute hold time? For that scenario and considering the amount of Gamma effect to be found on a max 240minute hold, how much time would be required to take Gamma into relevant consideration, Two hours, Tens, Hundreds, Thousands of hours?Yes,3rd edition of "Options made Complicated" by NewWurldDmn
How much gamma rate of change for a ~40delta based on a 3% move in a leveraged etf's underlying's price for a 60 minute hold on say a Thursday could there be? How much associated % reduction in that trade's net could there be?
How about a Friday afternoon?
I'm thinkin' it has relatively little effect on the profitability of the trade.
If that's true, then why would more than a passing familiarity with the definition of Gamma require more than an hour?
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For the time frame you are trading,and assuming you are trying to capture some multiple ATR move with a hard stop,simple is better...You don't need much more than Delta and simple payout diagrams..
The big question is would you buy more OTM options than ATM and in what ratio
The big question is would you buy more OTM options than ATM and in what ratio
Hell if I know, lol.
Here's what I'm thinkin...
If some highly liquid product, e.g. SQQQ 5minute chart generates a Long setup/trigger that provides a measured move target, then the idea would be to Not trade the sqqq - no, but to Buy a ~40delta Weekly Call option and exit that call at the target or exit that Call when the Chart's Stop is triggered. This trade shows a general duration of 20 to 90 minutes.
~40delta is the just a place to start exploring for Simple Fast Methods for selecting strike under this half-baked scheme. If ~75delta is better, that's cool. If ATM is better, that's cool. If this is a bad idea and if I find out for a reasonable price, that's cool.