Jedi Options - The Role of a Market Maker and Delta Hedging

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What is the role of Market Maker and Delta Hedging?
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In today's Jedi Options, Coach Tyler talks about Market Maker and Delta Hedging

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great video. just curious is this why sometimes when i buy a put, it'll shoot up like crazy? as the mm is basically buying the stock as a hedge? and sometimes i'll put a line on the chart wherever i bought those puts at, and it'll bounce off it. i thought it was a coincidence at first, but it happens all the time at random locations on the chart too lol. still watching the video, but wanted to get this post out of my head as i just thought about it.

Digitalgems
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Nice video, thanks for explaining! But there´s still one thing about delta hedging that I do not understand. It sounds like delta hedging was an absolutely risk free method to hedge an options portfolio but if you ever bought e.g. a straddle then you know that one has to delta hedge to cover the premiums paid. Otherwise he will realize a theta loss at expiration. So how can a market maker achieve to be fully without any market risk?

marcw.
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... Your example with you having bullish exposure you would want to short stock... Do you mean "short selling"? ... if so.. Would you borrowing the stock not count as buying and effect price but put more volume in the market causing it to drop perhaps (one mm couldn't probably make the market drop of course.. But say that all did)? Forgive me, I'm still learning after 7 years of study. Too much b.s. to sort through...😂😂

rickmiller
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Makes no sense. If a market maker buys a ton of stock to hedge the calls he sold, he can easily lose money when the stock price declines more than the premium. Doesn't seem neutral at all.

shumlanguage