How to Hedge Your Positions | Options Trading Concepts

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[dcarson]

6+ years later. Still excellent info today. Especially delta hedging.

[johnaugustin]

Anybody watching this. You can’t sell 4 calls when you only have 200 shares of a stock 1 contract is equivalent to 100 shares of the stock owned 4 contracts will equal to 400 shares which you don’t have so that makes no sense what he said and delta changes when the price of the stock changes selling an atm( at the money) call will only put your shares at more risk of being assigned of selling those shares. To really hedge you’ll have to sell weekly calls for short term gains on the stock since on the weekly even if a stock was to go up $100 it’ll come back down the best to do is to know the trend of that stock and know what calls to really sell. Example if you know your stock moves on average $10 a week it’d be best to sell a call that’s $15 higher for that week or even at that $10 mark so you know you’ll still keep your credit and your shares for that week and just keep doing it over and over and keep collecting premiums while keeping your stocks on the long run as well. Don’t go waste your long term shares for some short quick profits be smart

[amirmoezi]

Thanks a million for your invaluable content

[AliVallil]

I knew something about options and hedging. Now I know, I know nothing...

[mjuniorsc]

with the volatility is low, you can buy volatility with delta hedging doing the oposite. Sell the stock and buy a 2x call ATM neutralizing the delta. You will have less tetha affecting the position. so, short position in stock with long position in call is good too

[scarfo]

when over hedge and you have a net negative delta, wont that just make it a directional bet?..being that i should profit from any downwards movement

[tutumumu]

Assuming you sell a call(short) and at the same time you delta hedge it with stock. if the stock price drop say significantly, do you keep the premium at expiration or will the hedge offset the premium and you end up with 0 impact ?

[lasvegasadventures]

If Im long the stock and buy protective delta 1 put, that would negate any upside profit when the stock moves up and vice versa (taking into acct for the changing of the delta). So there is no point in buying that put since there is no benefit no matter what happens, right? So then how do you hedge your shares with puts while still being profitable when the shares move up in price?

[MonkeySpecs]

thanks for the info. In what situation will you deploy <100% or =100% hedges?

[ddljddlj]

i hve been in TA since 2018 and its very hard to know the direction most of the times...i never got time to enter in options and what i see in this video is all new and tough to understand...

[dmunchez]

Love this gotta get myself to this level

[officergregorystevens]

Is it hedging when I buy or sell an equity, and upon noticing it's going up or down respectively (the way I don't want it to go) I buy either calls or puts depending? Then at least it seems I can break even easier than waiting for the equity, or whatever undelying or instrument say WTI Crude Oil to go back to the price I sold or bought it

[dmunchez]

how would you factor in and adjust for theta if it was a prolonged trade?

[nayanmipun]

Hedging works when the trend returns to the hedged Long Short positions but if the trend doesn't return to the hedged Long Short entries there would be loss of the opposite position

[Raj.mulani]

Sir give example so we can understand 💯👍

[streetdreams]

This makes sense to me, but I can see why it could go over someone's head.

[jaybro]

He came here to know hedging now i don't know bo & co.. i will be back

[guy]

Lets say you own 100 shares @ 10 and sell 1 covered @ 12 .. if the price moves to 12.1 wouldn't you risk losing your shares and being left hanging with nothing?

[sekarramaswamy]

Sir make the video class in between 9 to 11 min.. to make it understand better...

[AdeshSoodeen]

You own 200 shares but are selling 4 Call contracts (400 shares) to Perfect Hedge? Also Delta changes when the price moves... This strategy makes no sense.