An (Simple) Option Trade

[DanPickUp]

Option strategies are also created to make the market liquid. Most never try options as they feel overwhelmed by the way they can be used and are introduced to the public in general.

At the moment we start to understand under what circumstances any option strategy can be used and at the moment we can combine that knowledge by knowing how an option works or what an option is, we are able to concur the market.

If we made that steps, we can choose and start to create our strategies we want to use for any specific market situations.

 

[rkkarnani]

THE GREEKS:

I am newbie, have just started to understand Options ! Did read about Option Greeks and all went over the head. Here just asking a almost juvenile question : Why do we take Interest % as 0 (zero) ??

 

[DanPickUp]

I am newbie, have just started to understand Options ! Did read about Option Greeks and all went over the head. Here just asking a almost juvenile question : Why do we take Interest % as 0 (zero) ??

Dear Rkkarnani

As it went over your head, how then did you start to understand it? How even it comes that you have questions after understanding it?

Never mind and let jokes be jokes.

Calculate it with other percentage and you will see the different and how much it is compare to take 0 instead 1 or what ever for the calculation. As the interest rates are in general low at those times, so not much different will be shown.

As the result of any math is only theoretical, we any way have to keep in mind the bid and ask spread.

So, any of such results are token as approximately and then our mind set makes the final price.

Good trading / DanPickUp

 

[jamit_05]

Great going... 6100 pair now costs 170; Down from 196; Good call.

6100 pair back UP to 183. But, destined to come down to 170.

 

[jamit_05]

Great going... 6100 pair now costs 170; Down from 196; Good call.

Cost up to 210... hope the trend reverses.

 

[PartTime_Trader]

Cost up to 210... hope the trend reverses.

Hello jamit

The position got exhausted a while back so not tracking this pair, shifted to 6k.

The process is same as i have demoed previously, we can do this with both long and short straddles, keep selling a part of the position to adjust delta back to near neutral.

Traders that are very technically inclined can base their decisions purely on Greeks (Delta in this case). Do have a bigger position to start with, so that you can keep selling 5-10% on small movements. Have moderate expectations from this strategy after all it is nothing but jobbing.

Don't linger on too long with the long straddles, remember Theta is the enemy.


Cheers
::thumb::