THE OPTIONS COURSE- Increasing Your Profits with Adjustments
THE OPTIONS COURSE Increasing Your Profits with Adjustments You can create the best trade in the world, but what you do after the trade is placed is crucial to your success. When you put on a trade that is perfectly delta neutral and the market makes a move, it changes your overall position delta. Your trade is no longer delta neutral. At this point, you can choose to maintain or exit the trade, or return to delta neutral by making adjustments. To bring a trade back to delta neutral (a position delta of zero), an adjustment can be made by purchasing or selling options and stocks (or futures) to offset your position. Determining which adjustment to make is a decision dependent on analysis and market experience. In general, when delta neutral trading guides your decision-making process, you know when and how to make an adjustment to your position. To a certain extent, adjustments are the real meat of delta neutral trading. As you become more experienced with