I used to play with futures but, right now, I am learning about options.
While playing with futures, I would wonder how to increase my reward to risk ratio.
Such as using stop loss and scaling up in size while my trades turned out to be favorable.
On a graph, it transforms the trade into a convex function rather than a linear one.
In a way, what I was doing was to increase the Gamma of my positions. Right ?
To leverage such a getting more delta from each price increment ..
Well ... What I am looking for with options is convexity.
Being able to be convex without leveraging, without increasing my risk.
What would be the strategy that have the biggest reward to risk ratio ?
I'am not concerned with the expected value of the strategy.
Not talking about probability, but asymmetries.
I know that buying way out the money option is such a strategy.
But analyzing those setups with IB tells me that the ratio is about 1 to 4 ...
Where I was actually able to expect a 1 to 10 ratio with futures and some tweaks.
How does one increase that asymmetry ?
While playing with futures, I would wonder how to increase my reward to risk ratio.
Such as using stop loss and scaling up in size while my trades turned out to be favorable.
On a graph, it transforms the trade into a convex function rather than a linear one.
In a way, what I was doing was to increase the Gamma of my positions. Right ?
To leverage such a getting more delta from each price increment ..
Well ... What I am looking for with options is convexity.
Being able to be convex without leveraging, without increasing my risk.
What would be the strategy that have the biggest reward to risk ratio ?
I'am not concerned with the expected value of the strategy.
Not talking about probability, but asymmetries.
I know that buying way out the money option is such a strategy.
But analyzing those setups with IB tells me that the ratio is about 1 to 4 ...
Where I was actually able to expect a 1 to 10 ratio with futures and some tweaks.
How does one increase that asymmetry ?
