Path to Consistency

Subhadip

Subhadip

Well-Known Member
#91
#91
Time is called THETA in option books.

Now is it a NO loss strategy?

Not at all.

Can it give a huge return?

Not at all.


Now how to earn this time value?

Easy- only Option selling.


Is it that simple?- then all the big money will be selling option & making millions.

If some one is selling, then the same someone must have been buying.

So option buying & option selling - almost all cases both can earn.

But the big factor of Option selling is TIME decay.

Also big factor for option buying is Volatility.

Now u know that THETA is friend of Sellers.

Vega is friend of buyers.
 
Subhadip

Subhadip

Well-Known Member
#92
#92
I will not go into great details of THETA, VEGA, Delta, Gamma.

Any one can learn all these from Zerodha Varsity.


Our profit comes , in option selling is by getting Theta (Time decay) but also controlling Vega along with Delta & Gamma.
 
Subhadip

Subhadip

Well-Known Member
#93
#93
All knows how to get Theta.

it is well known- just u have to sell option. that is it.

But one will loss in big amount if Vega increases.

Then what to do?

Any wild guess.
 
Tuna

Tuna

Listen and act, don't ask it, it doesn't oblige
#94
#94
Hedge ?


Sent from my iPhone using Tapatalk
 
Subhadip

Subhadip

Well-Known Member
#99
#99
vagar11 said:
May be something like selling ATM ITM to get advantage of theta decay and buying OTM/Deep OTM.

Need to think on the ratio in which we need to buy/sell them.
Click to expand...
How it will control Vega?
 
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