Dynamic Hedging Options - Make money if the stock moves either direction

Dynamic Hedging is a way to potentially make money if the stock moves down or massively takes off! It's super simple to execute and involves the shorting shares while simultaneously owning a long call. If the stock moves back and forth I make money off of the movement.

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▬ CONTENTS ▬▬▬▬▬▬▬▬▬▬

0:00 Intro into Dynamic Hedging
0:56 Download the Dynamic Hedging Record Keeper
1:39 Dynamic Hedging VS Straddle
2:48 Buying a Straddle in IBKR
3:29 Trading Checklist
5:29 Seeking Alpha Quant Rating
6:37 Entering a Dynamic Hedge in IBKR
8:47 Managing the Dynamic Hedge
9:26 How to record Trades
11:10 Calculate Position Delta
12:40 Risks of the Trade
13:05 Recording stock transactions
14:07 Daily Updates
17:40 Closing the Trade

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My primary investment strategy is long term high yield dividend investing, index funds and reducing risk and exposure using options. I have been actively trading the stock market for over 25 years and have built most of my wealth by reinvesting my dividends and following my 14 Personal Rules of investing. I actively trade options on both the American and Canadian Stock exchanges using options strategies and buying and holding high yield dividend paying stocks.

I generate monthly income in two ways. Averaging more than an annual 7% return by collecting dividends on high yield dividend stocks that I hold. The second income stream comes from the selling of option premium and taking advantage of theta decay. I love trading strangles, Iron condors and diagonal spread for maximizing returns. Delta neutral strategies allows me to make money in both bull and bear markets and limits my risk. Both of these strategies are suitable for passive income and create a stable predictable safe passive monthly income.

Let’s Get Rich Together
Levi Woods

Disclaimer: I am not a financial planner and am not offering investment advice. This is an opinion channel only and should not be taken as any form of financial advice. I receive a small commission from the purchase of any item from using the links listed above. There are financial risks involved in taking on any monetary transaction that I discuss in my videos.

#optionstrading #stockmarket #LetsGetRichTogether

[DrawbridgeFinance]

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[michaelpigassou]

Very interesting, can you provide a video with an example of a profitable trade using this strategy? Appreciated :)

[michaeldornisch]

Hi Levi,
Thanks for the excellent videos. I had a question about your patron I was considering. At the Option Traders Club level I understand we get notified of your option trades. Are those notifications at the end of the day or right after the trade executes? Thank you

[so-geht-Trading]

Hi, thank You for this great video. Did You do it with Camtasia ? - or wich Software did You use - Greetings from Switzerland

[rruuvvii]

Very good video. Clear and precise explanations. A question...Could the Excel table be used futures options ? Thank you

[黃小柏-ki]

great explaination, could you help to clarify below 2 questions?
1. why dont you buy put + short stock? it donst require the interest fee for inital build up
2. how to choose the underlying stock with high volitality?

[dofFive]

Not totally clear from the video why the dynamic hedged position is superior to a naked straddle - is the rationale that it's a shorter distance for the stock to move to reach profitability, or that you get to stay in the position for an extended period while you wait for the stock to make a big move without much/any theta decay (relative to ths straddle)? Also, can you do a video where you walk through the paired condors? (are you using shorter durations for the counter-trade for example)

[Kasseltrader]

How do you get a CREDIT in this strategy ? You buy 3 x Call for a Debit and for selling Shares you don´t get an initial Credit . This Strategy is a DEBIT Strategy at the beginning.

[samfahmy]

What is the software you use to edit your videos? Great job by the way !

[markmorrissey]

Levi - Thanks for the great video on dynamic delta hedging. I purchased your spreadsheet and reconfigured it for excel. I use Marketxls to input live option data. It seems to me that you can also construct a similar hedge with a long put and a long stock position. This would allow use of this strategy in an IRA. I’m having a bit of trouble wrapping my head around the P/L from doing this. I know you have the gains/losses computed in the spreadsheet, but a lot of trades don’t seem a generate a great amount of P/L. Is this to be expected? Tx - Mark

[TheEconomicElder]

I am considering writing a put and going short the stock on the strike price. I believe the only way to lose in this scenario is if the price continues to fluctuate in and out of the strike price. Please let me know if you have any thoughts on this matter. Thank you!

[Oct-jydz]

At 2:51, how do you get the "CHNG %" shown on your watch list?

[akshatrastogi]

What if the short stock starts falling in price and you buy but it still keeps falling (how will anyone time the bottom), won't you keep losing money on your long call?

[romanlukasek]

Can I use the sheets for trades where I buy stocks + long put?

[TaeWooKim-eept]

Do you still employ this strategy currently with your other strategies?

[matthewward]

Why would one need a patreon if you're a trading guru?

[primutinvestments]

The strategy alone it is not profitable most of the time if you use just one stock. This technique is used by large investors or market makers to reduce the risk in multiple basket of asset. At this point it is better to use a Straddle strategy to avoid high commission costs.

[erdemo]

you cant make money when the stock moves either side. because you neutralize delta already (its out of straddles profit logic) bcs when the stock moves either way you would have neutral delta. so you cant profit from the move of stock price. but its true you profit from selling high buying low. but can it cover the theta cost ? very limited profit seems on this strategy. it looks like selling straddle in mirror. it seems you have an idea thet if can volatility beats the time decay or time beats the volatility.

[kurtleimkuehler]

It seems their is no profit to this strategy.