Showing posts with the label greek-option-trading-strategies


THE OPTIONS COURSE The  Other  Greeks T o create a delta neutral trade, you need to select a calculated ratio  of short and long positions that combine to create an overall posi tion delta of zero. To accomplish this goal, it is helpful to review a  variety of risk exposure measurements. The option Greeks are a set of  measurements that can be used to explore the risk exposures of specific  trades. Since options and other trading instruments have a variety of  risk exposures that can vary dramatically over time or as markets move,  it is essential to understand the various risks associated with each trade  you place. DEFINING THE GREEKS Options traders have a multitude of different ways to make money by trad ing options. Traders can profit when a stock price moves substantially or  trades in a range. They can also make or lose money when implied volatil ity increases or decreases. To assess the advantage that one spread might  have over another, it is vital to con