Posted by DigiNomad on 1st of Aug 2022 at 02:24 pm
Watcdy - We're overbought on many timeframes currently, so I'm
leaning net short delta. I typically short 16 ish delta (puts and
calls) and wait until I have overbought or oversold conditions in
order to do so. I'm making really good money today so might
take some profits off the board and consider lining up some long
delta trades for the move to the 50 or 61.8% fib that I think is
likely. I'm also prepared to roll out and up to the next Fib level,
if needed (need to keep 80+% cash for this strategy to be safe).
*None of Matt's systems are triggering short right now, so
you're absolutely right that it's early...but that's for shorting
at the money (effectively) with equites...which I'm not
doing.
Posted by DigiNomad on 1st of Aug 2022 at 02:58 pm
Watcdy - Delta is a measure of how much the option price
will move in relation to a move in the underlying. It's complicated
but imagine that you are short a 16 delta call in SPY. In order to
neutralize the trade (sort of), you would simply buy 16 shares of
SPY against 1 short call...but then you would have to adjust as
conditions change.
I definitely wouldn't recommend jumping into SPX credit
spreads (short puts and calls) until you get some options trading
under your belt with smaller instruments. Try "TastyTrade.com" for
education. It's a great site and community - almost but not quite
as good as this one ;) Including a screenshot of a short SPX
trade I would put on today, if I wanted to add more shorts. Note
the trade characteristics in the left hand column. You can get your
a!@ handed to you pretty quickly, if you aren't careful. The short
call in this example is currently about 16 delta.
Watcdy - We're overbought on
SPX Just Some Things I'm Pondering
Posted by DigiNomad on 1st of Aug 2022 at 02:24 pm
Watcdy - We're overbought on many timeframes currently, so I'm leaning net short delta. I typically short 16 ish delta (puts and calls) and wait until I have overbought or oversold conditions in order to do so. I'm making really good money today so might take some profits off the board and consider lining up some long delta trades for the move to the 50 or 61.8% fib that I think is likely. I'm also prepared to roll out and up to the next Fib level, if needed (need to keep 80+% cash for this strategy to be safe).
*None of Matt's systems are triggering short right now, so you're absolutely right that it's early...but that's for shorting at the money (effectively) with equites...which I'm not doing.
One more question- 16 delta
Posted by watcdy on 1st of Aug 2022 at 02:37 pm
One more question- 16 delta ?
Watcdy - Delta is a
Posted by DigiNomad on 1st of Aug 2022 at 02:58 pm
Watcdy - Delta is a measure of how much the option price will move in relation to a move in the underlying. It's complicated but imagine that you are short a 16 delta call in SPY. In order to neutralize the trade (sort of), you would simply buy 16 shares of SPY against 1 short call...but then you would have to adjust as conditions change.
I definitely wouldn't recommend jumping into SPX credit spreads (short puts and calls) until you get some options trading under your belt with smaller instruments. Try "TastyTrade.com" for education. It's a great site and community - almost but not quite as good as this one ;) Including a screenshot of a short SPX trade I would put on today, if I wanted to add more shorts. Note the trade characteristics in the left hand column. You can get your a!@ handed to you pretty quickly, if you aren't careful. The short call in this example is currently about 16 delta.
Got it. Thx very much
Posted by watcdy on 1st of Aug 2022 at 02:34 pm
Got it. Thx very much