What is there to chew on?
Overnight, you may have forgotten what your own early days of learning this stuff were like. Partly, you need to figure out what's important (because there's a
flood of info, much of it total bullshit, most of the rest trying to get you to serve someone else's ends, what little is left subject to interpretation); partly, that you need to figure out how important the relative pieces are so you can approach them with the right attitude (i.e., a trade going 1% of your net liq into the red is just a fact to be dealt with, and probably not too uncommon. Which implies that there are standard tools - in this case, hedging - and that I
must learn how to use them well, ASAP.) Watching Destriero do this matter-of-factly is giving me great feedback that aligns with what I'm learning elsewhere.
But that's not the part needing the real skull sweat - although a little more clarity on some of the terms would be great. "Took 12 points of heat" - what is that, went 12 points ITM before he adjusted it by shorting stock? No, what's really important to me is visualizing that trade and figuring out the "whys" at different points as it progressed. OK, so he's long and it's going the wrong way. So he hedges it - and I'm going to assume he shorted the full size, not just the delta, because (as I've just learned by doing it) the latter would just lock in the loss - on the assumption that the move down should continue. Where is that assumption coming from? (If it's experience, well, I'll just have to defer that route to winning. If it's not... what is it and can I learn it?)
That kind of walk-through is what I mean by chewing on it. And I'm putting a lot of effort into it because I'm still building the fundamentals, and screwing
that up results in ugly long-term costs of all sorts. Watching a professional at work gives you all sorts of clues.
You should see the drama of when I take over a thousand points of heat with no hedging. Those are the blue-ball days. Dest is still the man.
I'd be curious to find out why you'd do that (I'm
assuming it's voluntary...)
I was just at a rather decent steakhouse last night, and watching their butcher cutting the meat - economy of motion, easy familiarity, nearly-automatic correct interaction with potentially dangerous machinery - was a pleasure. There's definitely some of that involved here, too. But whereas I'm not looking to be a butcher, this is something I'm fully committed to learning - so it's a lot more compelling. Plus a whole of fun... sorta like watching your favorite team hammer that ball into the goal. Go, Dest!
