I think, generally, options start trading in sync with the underlying stock, but in practice it can mean a few minutes delay (in some cases 15 min and more when the stock is excessively volatile). If you want to lock in gains on an options position you can always trade the stock to neutralize deltas and then close the whole position out when the bids/offers are posted.
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Long straddle
- Thread starter a529612
- Start date
I think, generally, options start trading in sync with the underlying stock, but in practice it can mean a few minutes delay (in some cases 15 min and more when the stock is excessively volatile). If you want to lock in gains on an options position you can always trade the stock to neutralize deltas and then close the whole position out when the bids/offers are posted.
Quote from jj90:
IMO there's nothing wrong with selling 'cheap gamma' OTMs, just be sure to go even further out and buy even more wings at that.
There is if you sell too much and overleverage yourself!
Cheap gamma is difficult to hedge/replicate with the underlying, since deltas are being created so quickly. OTM options--the teenies that make up the so-called "credit spread"--have little gamma and are therefore at the end of the gamma curve.
But watch out if the underlying starts to move!
At least with selling straddles, you have more time to hedge if the position goes against you.
{I think, generally, options start trading in sync with the underlying stock, but in practice it can mean a few minutes delay (in some cases 15 min and more when the stock is excessively volatile). If you want to lock in gains on an options position you can always trade the stock to neutralize deltas and then close the whole position out when the bids/offers are posted.}
I trade mostly OIH options and a day like today is a perfect example of how it hurts to have to wait 15 minutes. I trade very short term, mostly overnight or a day or two...I like to take losses immediately, and today I was long a put and the OIH opened in my favor, but went straight up...till the option opens and get me out instead of b/e or losing a little, it turns into a big loss...I just find it very annoying and it really hurts my strategy...
I was wondering if there were any "official" times from the exchanges etc. about the market makers having to make a market....
Thanks
I trade mostly OIH options and a day like today is a perfect example of how it hurts to have to wait 15 minutes. I trade very short term, mostly overnight or a day or two...I like to take losses immediately, and today I was long a put and the OIH opened in my favor, but went straight up...till the option opens and get me out instead of b/e or losing a little, it turns into a big loss...I just find it very annoying and it really hurts my strategy...
I was wondering if there were any "official" times from the exchanges etc. about the market makers having to make a market....
Thanks
Quote from Samc:
{I think, generally, options start trading in sync with the underlying stock, but in practice it can mean a few minutes delay (in some cases 15 min and more when the stock is excessively volatile). If you want to lock in gains on an options position you can always trade the stock to neutralize deltas and then close the whole position out when the bids/offers are posted.}
I trade mostly OIH options and a day like today is a perfect example of how it hurts to have to wait 15 minutes. I trade very short term, mostly overnight or a day or two...I like to take losses immediately, and today I was long a put and the OIH opened in my favor, but went straight up...till the option opens and get me out instead of b/e or losing a little, it turns into a big loss...I just find it very annoying and it really hurts my strategy...
I was wondering if there were any "official" times from the exchanges etc. about the market makers having to make a market....
Thanks
Market makers can always declare fast market or imbalance and not quote.
As I said earlier, if you need to lock in profit then use the underlying and then unwind once the quotes are up.
Yeah, selling into peak gamma is never nice for hedging purposes vs selling peak gamma. However I would say those selling 'credit' spreads are more concerned about black swans then having it move up the gamma slope. That's what I was saying by buying more wings to prevent that. Of course, no competent trader will sit and let those short gammas run up against their P&L without doing something.