odometer isn't a strategy for going fast. A strategy for going fast is to use slick tires and balance the weight of the car to maximize traction and to improve the air filters to get more air into the engine cylanders.
How many options strategies should you realistically master?
- Thread starter turkeyneck
- Start date
odometer isn't a strategy for going fast. A strategy for going fast is to use slick tires and balance the weight of the car to maximize traction and to improve the air filters to get more air into the engine cylanders.
I use 2!
The first one which is at the same time the main one too, is the one that I stick to all the time (I can not specify a name for that since I use funda news as a framework and then apply technical analysis to that + my own risk management + ............. = it really suits me)
but the 2nd one is scalping! I scalp gold and I do it when I do not have anything else to do.
That's me
The first one which is at the same time the main one too, is the one that I stick to all the time (I can not specify a name for that since I use funda news as a framework and then apply technical analysis to that + my own risk management + ............. = it really suits me)
but the 2nd one is scalping! I scalp gold and I do it when I do not have anything else to do.
That's me
to be clearer a strategy is: selling vol in a stock where skew has steepend and the stock has not moved. Why? Because in those instances vol is overpriced.
or buying long term vol against short term vol in situations where the term structure is inverted and earning are after the first maturity. Why? Because the market has mispriced the back vol relative to the front vol.
Agreed, those are strategy descriptions perhaps very simply described at least as "Term and/or vertical IV Skew" and both would be much more descriptive than saying its a "diagonal or vertical" STRATEGY. Add details of capital allocations and management actions (e.g. close @ profit targets or risk reduction actions when x), then it becomes close to a trading "plan".
the strategy is what signal you use to chose your delta, theta, Vega position.
For the majority of traders,I would say if you aren't somewhat decent calling direction,no option strategy will save you...
I would keep it simple and go with long options and or verticals,and possibly flys..
I think the average trader cant get short vol in a meaningful way,without risking extinction..
If you are an investor,I would add risk reversals
W
I would keep it simple and go with long options and or verticals,and possibly flys..
I think the average trader cant get short vol in a meaningful way,without risking extinction..
If you are an investor,I would add risk reversals
W
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Agreed.
To make money you have to predict direction in either spot, vol, or both.
The strategy determines how you predict direction.
The structure (putspread, butterfly) is how you monetize the strategy.
The risks (greeks) are how you describe the structure's profit.
Seems if you’re decent calling direction, you should trade delta for PnL. If you’re an unlucky investor, you should hedge your delta feelings with theta and/or Vega PnL. Also add in some hv/iv analysis and IV mean reversion (and skew analysis if you know how). Cross your fingers for some market accommodation to your “strategy”. Size your risks to defeat emotional trading but also keep enough risk on to make it worth your precious limited time available.
Goal: Net + PnL
Strategy: Use delta and/or theta and/or Vega to achieve goal.
Tactics: indicators (ticker trends, IV, HV, etcc), strikes/expiry’s (e.g. delta, theta,Vega chosen), Management plans, capital allocation.
Requirement: Market accommodation to your strategy and tactics.
IMHO
