Trading with Krugman

[sle]

So I will reiterate what I said. I can't answer your question because it is too vague. It depends on *how* the portfolio is achieving delta neutrality. There are millions of strategies, variations and combinations that can all be "delta neutral". All will have different profit and risk profiles, different greek behaviors.

I did not ask a question, I was making a statement. My statement that "delta neutrality converts real life distribution to a risk neutral one" is not vague at all

This remind me of:

 

[krugman25]

I'm not smart enough to know, but feels like there's a blowup waiting for you somewhere with this approach.

But it brings up a good point which is that there are risks in my current portfolio I need to reduce.

One is with my buy and holds. Too much capital in too few underlyings. I will resolve that by adding more buy and holds from different underlyings.

The other is with my short options. I am not too well diversified there. Once my positions from December swing to profits I am going to let a few roll off and get short some more uncorrelated underlyings. If done right my theta numbers should be about the same but the risk will be lower.

 

[nooby_mcnoob]

Don't mind @sle - he hates it when engineer guys think they'll make money in the market.

 

[nooby_mcnoob]

The other is with my short options. I am not too well diversified there. Once my positions from December swing to profits I am going to let a few roll off and get short some more uncorrelated underlyings. If done right my theta numbers should be about the same but the risk will be lower.

I'm very interested in how this goes, following your journal.

 

[krugman25]

Don't mind @sle - he hates it when engineer guys think they'll make money in the market.

I never went to college. barely graduated high school(no joke here), so I don't think I qualify as an engineer.

 

[nooby_mcnoob]

Interesting. Well, keep posting on here and being open minded and I think you'll improve your chances. I'm just teasing @sle though he knows it's true.

 

[krugman25]

I did not ask a question, I was making a statement.

You certainly did ask a question, the one I was answering. You even called it dumb, but know there are no dumb questions in Krugman's Journal.

Ok. There are some questions that are kind of dumb, but not this one, lol.


" I'm sorry for asking dumb questions, but how can someone be Delta neutral yet outperform a trending market?" - @sle

 

[sle]

Don't mind @sle - he hates it when engineer guys think they'll make money in the market.

"true story!"

 

[sle]

You certainly did ask a question, the one I was answering. You even called it dumb, but know there are no dumb questions in Krugman Journal.

Ok. There are some questions that are kind of dumb, but not this one, lol.


" I'm sorry for asking dumb questions, but how can someone be Delta neutral yet outperform a trending market?" - @sle

Not that it matters, I was answering a question from @qlai

I'm sorry for asking dumb questions, but how can someone be Delta neutral yet outperform a trending market? How long are these horizons for this to happen - 30 to 50 years?

However, I will ask a question now - do you try to forecast volatility/distribution in any form or do you use some price-based break-evens and such?

 

[krugman25]

However, I will ask a question now - do you try to forecast volatility/distribution in any form or do you use some price-based break-evens and such?

Now your just being a question hog