Determine: 1. Daily Theta: percentage of net liq, between 0.1% (conservative) and 0.5% (aggressive) 2. Delta: a) bullish: +beta-weighted deltas (more positive = more bullish, beta-weight to SPY) b) bearish: 1:2 -delta:theta ratio c) neutral: +-0.1% of net liq
hey Jim, im going to some rough times in my account. this video showed me that I was too big. it was exactly what I needed to see today. and once again. I love the tasty trade family
This was great! Thank you so much James, highly appreciated it. Your teaching style fits my needs. Finally build my excel spreadsheet which tracks my portfolio goals. Yeahh...go for gold!
Dr. Jim, you're courses are fantastic. I've now watched each of the crash courses and have learned more than I have anywhere else - by a long shot. I appreciate your teaching style and the organized way that you present the material. Thank you very much!
If your Theta is super high, it would mean you are selling options with a delta greater then 30, more like 50. Your strangles would be more like straddles. Strikes would get breached and go ITM much easier. As I'm sure Dr. Jim would say, that's the Gotcha to the Gimmie of a high theta.
Be sure to *validate* your computed Greeks against your own observations! It's easy to compute that you'd like to adjust your delta and perform the required trades only to discover that your resulting portfolio did not perform anywhere close to your calculations. For example, if I trade far OTM contracts, I use a modified delta calculation to compute the "true" delta exposure and therefore the required hedge (NOT using the theoretical delta calculation provided by the trading platform). I lost a good chunk of profits from bad hedges before I learned to tweak the Greeks!
Right now, I'm just trying to make trades on a consistent basis, lol. The fear of failure is strong at the beginning. Some day I'll worry about my portfolio as a whole, so this is great information to have and be able to look back on when I'm ready. Right now, managing trades is my biggest concern, so I'm looking forward to ep. 4!
Good stuff, thanks! For the bearish position, the amount of short delta is based on the total daily theta not the 25% captured, correct? For example, $100,000 Net Liq. targeting 0.2% daily theta equals $200 with $50 expected capture. For a 1:2 delta to theta ratio, we use 100 short delta not 25 short delta, right? Just want to clarify...
At this point, I just can't see a longer term bearish trend in the market. Every time I see a dip, it doesn't even last long enough to go long term on puts. I'd rather just add puts at the first sign of a downtrend and then sell them once the govt or whatever causes the market to start to bounce back.
Awesome video Jim!!! You have the best stuff on Tasty more of these please! Do you have or know of any content on how Gamma and Theta interact if not could you make some? I have a portfolio currently with some long plays on consisting of PMCCs and ZEBRAs and I'm also short two strangles to give me some Theta decay. Since I have a larger positive Gamma given to me by my synthetic long positions I assume I can go for a lower Delta to Theta ratio than I would be if I had a negative Gamma given the same Delta exposure. Am I correct in that assumption? My current portfolio greeks are. Delta: 15 (QQQ weighted) Theta: 11 Gamma: 34 Do these portfolio greek values seem reasonable to you given my positive Gamma exposure? Oh yeah my theta is just a shave over 10 percent of 1 percent of my net Liq. Thx and keep up the great work.
Determine:
1. Daily Theta: percentage of net liq, between 0.1% (conservative) and 0.5% (aggressive)
2. Delta:
a) bullish: +beta-weighted deltas (more positive = more bullish, beta-weight to SPY)
b) bearish: 1:2 -delta:theta ratio
c) neutral: +-0.1% of net liq
Bingo.
hey Jim, im going to some rough times in my account. this video showed me that I was too big. it was exactly what I needed to see today. and once again. I love the tasty trade family
This was great! Thank you so much James, highly appreciated it. Your teaching style fits my needs. Finally build my excel spreadsheet which tracks my portfolio goals. Yeahh...go for gold!
I loved the visuals! This will really help me level up. My theta was way too low
Dr. Jim, you're courses are fantastic. I've now watched each of the crash courses and have learned more than I have anywhere else - by a long shot. I appreciate your teaching style and the organized way that you present the material. Thank you very much!
Love your material!!! Really useful information. This is just the information I need to manage my portfolio. Thank you. 👍🙏😀
Terrific! Thanks for watching
Dr. Jim, can you elaborate on “too HIGH for theta”? Why?
If your Theta is super high, it would mean you are selling options with a delta greater then 30, more like 50.
Your strangles would be more like straddles. Strikes would get breached and go ITM much easier.
As I'm sure Dr. Jim would say, that's the Gotcha to the Gimmie of a high theta.
This is fantastic! Thanks so much for outlining portfolio management. Now when Tom says he is 1:1, we now can know what he is talking about!
You got it! But be careful thinking you know what Tom means when he says something - famous last words
Thank you for your great classes.
Be sure to *validate* your computed Greeks against your own observations!
It's easy to compute that you'd like to adjust your delta and perform the required trades only to discover that your resulting portfolio did not perform anywhere close to your calculations.
For example, if I trade far OTM contracts, I use a modified delta calculation to compute the "true" delta exposure and therefore the required hedge (NOT using the theoretical delta calculation provided by the trading platform).
I lost a good chunk of profits from bad hedges before I learned to tweak the Greeks!
Right now, I'm just trying to make trades on a consistent basis, lol. The fear of failure is strong at the beginning. Some day I'll worry about my portfolio as a whole, so this is great information to have and be able to look back on when I'm ready. Right now, managing trades is my biggest concern, so I'm looking forward to ep. 4!
This is actually the very foundation of your trading expectations if your portfolio is option-based
Good advice, thanks Jim.
Thanks for watching!
Great stuff! 💪
Thank you!
Awesome topic Dr Jim. Admire your thought process and simplifying complex concepts and strategies. Keep up the great work.
Thanks, Paresh! That means a lot to me - thank you
So is this in an option portfolio only or any investment portfolio?
This one is really good so far.. haha I do not want it to end...damn the 3 series are really good. ( greeks, defending trades and this one)
So awesome, Juan! I really appreciate it...I have at least 2 more ideas for Crash Course, so thankfully, we've got a few more coming :)
👍👍👍Very very good👏!
Good stuff, thanks! For the bearish position, the amount of short delta is based on the total daily theta not the 25% captured, correct? For example, $100,000 Net Liq. targeting 0.2% daily theta equals $200 with $50 expected capture. For a 1:2 delta to theta ratio, we use 100 short delta not 25 short delta, right? Just want to clarify...
Wow, a lot to digest. But even more amazing, how do you find the time for both options training and MMA? Lol
you should make this video with the tastyworks plarform!!!
At this point, I just can't see a longer term bearish trend in the market. Every time I see a dip, it doesn't even last long enough to go long term on puts. I'd rather just add puts at the first sign of a downtrend and then sell them once the govt or whatever causes the market to start to bounce back.
Awesome video Jim!!! You have the best stuff on Tasty more of these please! Do you have or know of any content on how Gamma and Theta interact if not could you make some?
I have a portfolio currently with some long plays on consisting of PMCCs and ZEBRAs and I'm also short two strangles to give me some Theta decay. Since I have a larger positive Gamma given to me by my synthetic long positions I assume I can go for a lower Delta to Theta ratio than I would be if I had a negative Gamma given the same Delta exposure. Am I correct in that assumption?
My current portfolio greeks are. Delta: 15 (QQQ weighted) Theta: 11 Gamma: 34
Do these portfolio greek values seem reasonable to you given my positive Gamma exposure? Oh yeah my theta is just a shave over 10 percent of 1 percent of my net Liq. Thx and keep up the great work.
how do you calculate daily theta?
I wonder did the wonderful Dr JIm ever appear on Doctor Who on the BBC.
Betas are fighting fish 🐠
Where is live chat?
just buy btc
This didn’t age well.