Not necessarily, really.
Just curious, do you mean limiting the risk (ie. the possible loss) to max. 5% by using just options, but then w/o a capping at the other side (or a bigger capping there)? Let's know, thx.
Options as an insurance - Why is it not working? Or does it? VAR 5% How?
- Thread starter thecoder
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Just curious, do you mean limiting the risk (ie. the possible loss) to max. 5% by using just options, but then w/o a capping at the other side (or a bigger capping there)? Let's know, thx.
Can't believe! Show me... the money
Or are you just sarcastic, trying to make a bad joke or a satire, maybe?
You could just buy a long dated, deep ITM call option. Unlimited upside with limited downside. Cost of insurance is the extrinsic value of the call.
Downsides: sometimes poor liquidity, no dividends, short term capital gains
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Hmm. you sure? How? I tried to test this by buying a deep ITM Long Call DTE=3 yrs, but PL chart doesn't look any good: https://optioncreator.com/sth8uhc
Or is something missing in the basket?
Look at fewer DTE. 80-90 delta. Roll when it gets to 90 DTE and you'll keep most of the extrinsic value.
What underlying are you trading? I cant see it on your option tool
It's just a generic Black-Scholes tool, it works w/o any market data.
Best would be if you post a complete example with your source of data and/or tools etc.
Sounds familiar. Do have to withstand and keep in mind the (temporary) drawdown
Lol...you will regret "revealing" your better model
no drawdowns. But the world isn’t ready for my massive math prowness.