Day Trading Options

You are asking a loaded question..
Are you buying ONE 70 Delta call vs ONE 40 Delta call??

Or are you buying equal deltas,i.e. more of the .40 Delta call..

Or are you looking to spend the same dollar amount on the 40 Delta call as you would spend for the 70 Delta call...equal dollars..

Comparing a single 70 Delta call vs a single 40 delta call is silly.Totally different bet.. If you are good,but high Delta.If you suck,but low Delta..




easymon1 said:
You know your stuff and how to explain it.
As a way to pick a strike for daytrade (buy call or put), if trader A uses 75 delta and trader B 40d, what would be pro / cons of each pick?
More...
 
taowave said:
Or are you looking to spend the same dollar amount on the 40 Delta call as you would spend for the 70 Delta call...equal dollars..
More...
I would be looking to spend the same dollar amount on the 40 Delta call as I would spend for the 70 Delta call...equal dollars..
The idea being to daytrade by buying calls or puts on stocks or etfs held for 2 days max, likely out before eod by using setups and triggers off of a 5minute chart.
 
Then its a much tougher question..It appears you are a backspreader(not an insult)..

Backtesting(orats) would be the best approach
 
taowave said:
not an insult
More...
For example if a guy decided during the 13:45 bar that he wanted to get into this move and exit around the next piv to the north ... popqo.png so he goes over to the option chain for this thing and buys calls: a half dose of 40delta and a half dose of 70delta. Which would pay better over a sizable number of moves and charts like this would you think?
 
If you are Day trading,you obviously cant afford too much slippage,so thats a factor....

Are you looking for leverage and trading with tight stops??

What sort of move relative to ATR are you looking to capture?

I have only backtested options on longer time frames. I cant backtest intraday...
 
Last edited:
taowave said:
If you are Day trading,you obviously cant afford too much slippage,so thats a factor....

Are you looking for leverage and trading with tight stops??

What sort of move relative to ATR are you looking to capture?

I have only backtested options on longer time frames. I cant backtest intraday...
More...
Are you looking for leverage and trading with tight stops??
Something like this...uvxy 5m vs option call 40 or 75pc delta.jpg
 
taowave said:
If you are Day trading,you obviously cant afford too much slippage,so thats a factor....

Are you looking for leverage and trading with tight stops??

What sort of move relative to ATR are you looking to capture?

I have only backtested options on longer time frames. I cant backtest intraday...
More...
Do you know a source where I can get data for the grey boxes in the image above?
 
I like to sell options against big moves and way OTM and I like to get the top tick or close to it for the day.

My scheme works OK. On NVDA today (3/24/2022) I got a call off at 1.60 which was top tick for a while until someone sold at 1.66. (4/14 340 Call)

My method as shown in the picture uses an arbitrary Vol Expansion of 15% and an estimated top price of the stock off the chart which works OK.

I know the best way to try and figure the top price is by using vega but I don't know how to estimate the implied
volatility that the option would be if the stock got to the projected price to apply to the current option price at the current stock price.

Any help would be appreciated.
 

Attachments

  • Option Pricing tool.PNG
    Option Pricing tool.PNG
    9.9 KB · Views: 37
If you are day trading option:

So you need to be flat by the end of day, why would anyone trade OTM options vs ITM?

My thought process is, ITM options have higher deltas which equal more gains on the intraday moves, right? Where as OTM options have lower deltas.

Thoughts/help please?

Thank you
 
You must log in or register to reply here.
Back
Top