Option Trading Delta Neutral and Non Directional Trading

✔️ Podcast:

✅ Please like this video and subscribe!

---------

----
🛑 David Jaffee & BestStockStrategy are NOT, in any capacity, a licensed financial advisor (adviser), registered investment advisor, registered broker-dealer or FINRA | SIPC | NFA-member firm. Examples presented in this video, or anywhere else, including video tutorials, strategies, articles, emails, newsletters, and all other content of Company’s products (collectively, the “Information”) are provided for informational and educational purposes only. Such set-ups are not solicitations of any kind or order to buy or sell a financial security and should not be construed as investment advice under any circumstances. David Jaffee and BestStockStrategy will NOT be held liable for losses resulting from information or advice presented; the use of such information is entirely at the risk of the user. The sole and exclusive maximum liability to David Jaffee and BestStockStrategy for any damages or losses shall solely be dissatisfaction to the user. The risk of loss in trading securities, options, futures and forex can be substantial. Options involve risk and are not suitable for all investors. Consider all relevant risk factors, including their own personal financial situation, before trading. Past results of any individual or trading system published by Company are not indicative of future returns.

#stockmarket #optiontrading #trading

[zadokmotorfreight]

I've been trading options for a couple of years now. Your advice is clear, concise, and on point.

[preezy]

When you say 'long dated option' what time frame are you talking about? For example, if I was short a put option on an underlying with 45 DTE and wanted to hedge by buying a further dated put option, how far out would you look?

[IIIKingsMedia]

Thank you for the important info as always...i understand exactly what you mean! Happy Thanksgiving! RESPECT!

[lessismore]

If you have a delta neutral strategy in place, do you think something like a Rhino trade structure might help as IV comes down and the market returns to growth. For example, if you have a delta neurtal strategy, maybe put on a Rhino structure after the selloff at 100DTE?

[mcarchive]

I have a question for you...
I am going to get an settlement soon for bodily injury.
My plan is to study IT and so I can get an remote job. To cut back on living expenses move aboard for a few and enjoy life to see the world.
I was wondering would it be a good idea to either buy an laundromat or an car wash or is there a better option?

Very good video like always.

[maxeisenhardt]

Excellent video!👍🏿

If I may add to your argument, another problem with "delta neutral" strategies is that while a spread may start out as delta neutral, the drift of the underlying price causes the spread to grow a delta that is very much biased towards bullish or bearish as the date of expiration nears.

I can't tell you how many times I entered into a seemingly delta neutral strategy (straddles & iron condors), only to be praying a few days later for the underlying stock to please PLEASE move up or down!!

[REALPLSHOWN]

When it comes to being optimal and comparing a long bias short premium strategy vs delta neutral I would consider not only the nominal returns but the risk adjusted returns. Also I have found that long OTM puts are a better hedge due to Vomma. In the crash of 2020 I saw OTM puts go to 90X their value when compared to ITM which was much lower.

[joellim]

Why is selling covered calls a bad hedging strategy? If stock falls, at least I still have the premium. If stock goes up and my shares get called, I get capital appreciation + premium. So I don't quite understand why you said what you said. Hope you can elaborate. Thanks!

[jeremiahmiller]

Happy Thanksgiving! Your the only guy who can wear a nasal strip and glasses and look like a badass

[petrophysics]

I have come to almost exactly the same conclusion as you dave . I have a lot of respect for tasty Tom and Bat as very experienced and n traders and what they have achieved with tasty - very admirable - but their strategy of naked shorts and delta neutral 😅is ok but disastrous in a sell off! In fact it is calamitous and doesn’t account for the markets upward bias OR put skew.
Naked Short calls are very dangerous and it annoys me that tasty refuse to voice this fact. I agree with you dave that the best is short puts with 5 delta long insurance puts which must be “notched”up when iv Is low or stock jumps up.

You are one of the best and most honest internet gurus with your personal failings too - keep it up dave!
Cheers mark d

[udarpavarota]

The VIX is very low. Should we still trade options when the VIX is low?

[victor]

How would you be hedging all the time for a VIX spike or an event when the market falls 5 to 10% in a week? I think that would be extremely expensive to maintain and would lose money long term?

Happy Thanksgiving David!

[gobele]

I think Tasty Trade did a market measure segment and found out that the call side gets tested the most.

[ussielhernandezgonzalez]

Yes, that's why simply going long the S&P crushes most day traders and hedge funds