- Option Gamma - Option Trading Tips
- Put Ratio Spread Explained | Online Option Trading Guide
- Synthetic Long Put - The Options Industry Council (OIC)
Are you talking about the video on this site above? That s where I say take a look at this video. Then I provide a link to the OU site. The video above on this site does indeed do more than describe what gamma is and elaborates on gamma trading.
Please let me know if I have missed something or if you think the video above is incorrect.
Option Gamma - Option Trading Tips
It is not particularly popular, because it entails a short stock position. A synthetic long put is often established as an adjustment to what was originally simply a short stock position.
Put Ratio Spread Explained | Online Option Trading Guide
In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions. They are known as "the greeks".. [Read on.]
Synthetic Long Put - The Options Industry Council (OIC)
But that's what risk graphs are for. They let you isolate the probable behavior of any option position, no matter how complex, to a single picture that is easy to remember. Later, even if a picture of the graph is not right in front of you, just seeing a current quote for the underlying stock will allow you to have a good idea of how well a trade is doing. That is why understanding how to use profit/loss diagrams is an indispensable skill for every options trader.
Nial, you are using $655 as example for risk, when would
you rise the stake to say $755, would that be after a set
winning days, or doubling of your account, what criteria would you use?
68k calls traded through the $6 October calls on $GFI Monday. About 65k in open interest across the entire expiration, so this is a pretty large bet someone is making. I bought 65 contracts at out that price is pretty bad as the stock sold off from the open. I probably could have bought in lower if I'd paid attention to the pre-open..
Sadly though, 95% people will not take the time to discover this truth so in the meantime I along with other professional traders will be on the other side of the losing trades that the newbies continue to take until they realize there is no magic indicator or forex robot that exists.
Note: While we have covered the use of this strategy with reference to stock options, the protective put is equally applicable using ETF options, index options as well as options on futures.
It's not always a good idea to take on short volatility strategies pre-earnings, but take a look at this Iron Condor setup for GLW.