How to trade short straddles and strangles delta neutral. In addition, we also discuss how to expand your straddle and strangle positions into an "Iron Condor."
Don't Forget Your Shorts – Part Two
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Don't Forget Your Shorts
Straddles and strangles are popular option positions that allow traders to profit regardless of market direction. These positions are usually discussed from the long side, but there is another side to this story – the short side. This article will explore the pros and cons of selling premium by shorting straddles and strangles.
How To Hedge Your Stock Positions Using Collars – Part Two
How to construct "costless collars," "diagonal collars" and "bearish collars" using options.
How To Hedge Your Stock Positions Using Collars
It is well known that you can hedge a stock by either buying a put or by writing a call on it. What is not so well known is that you can combine these two strategies. This long stock + short call + long put combination is known as a "collar"…
Direction Doesn't Matter: Trading Options Delta Neutral – Part Three
The real question is not how to keep a position delta neutral, that's fairly easy, but rather when to make the adjustments. This is where some art gets mixed in with the science…
Direction Doesn't Matter: Trading Options Delta Neutral – Part Three
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Direction Doesn't Matter: Trading Options Delta Neutral – Part Two
Exploring the impact of delta adjustments on delta neutral options positions…
Direction Doesn't Matter: Trading Options Delta Neutral
The consequence of having a position that is delta neutral is that for small changes in the price of the stock, the total value of the position does not change. Note the emphasis on the word small. In effect, by making a position delta neutral, we have eliminated, or at least reduced, the impact of a change in the value of the stock on the value of the position.
How Vega (and the VIX) Can Deceive Options Traders – Part Two
Are you a volatility trader? Did your long volatility portfolio suffer despite a rally in the VIX? If so, then you may be one of the many options traders that has been fooled by Vega. Read on for a few simple steps to understanding this common, and infuriating, problem…
How Vega (and the VIX) Can Deceive Options Traders
Are you a volatility trader? Did your long volatility portfolio suffer despite a rally in the VIX? If so, then you may be one of the many options traders that has been fooled by Vega. Read on for a few simple steps to understanding this common, and infuriating, problem…
Options Update: Occidental Petroleum (OXY) & Citigroup (C)
Options Update: Occidental Petroleum (OXY)
Options Update: Freddie Mac (FRE) & Bear Stearns (BSC)
Options Update for Freddie Mac (FRE) and Bear Stearns (BSC)