Advanced DELTA HEDGING Technique To SAVE Your Option Trades 💰

Especially if you sell naked options (i.e. short puts, short calls, strangles, straddles, ratio spreads, etc.), you need to have a plan to defend those positions when things go wrong. In this next episode of my live options trading series, I will walk you through a more advanced delta hedging technique that I invented which can be used to potentially turn a losing trade back into profits! We'll dive into a real life example on Royal Caribbean (RCL) where I initially sold naked calls, lost a lot of money from trying to defend the trade with long stock, and ultimately turned things around by selling puts and shorting the stock!

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Chapters:
0:00 Introduction
1:36 Important RCL Trade Context
2:27 How My Custom Option Selling Strategy Works
6:24 How I've Been Defending My RCL Position
9:25 Turning Things Around With Advanced Delta Hedging
18:14 AUTOMATE Your Options Trading With Option Alpha
19:20 Wrapping Up

#optionstrading #optionselling #thinkorswim

[scottreesetradinginvesting]

Hope all this stuff made sense! But if not, please ask any and all questions! :)

[sarkiskalfaian]

This is the beauty of options where you can do wonders to fix your trades. I kind of use the same method by selling additional puts or calls to offset the debit amount. Keep it up man and i'll be following your journey and learn more.

[rantg]

you are very clear, love your content.

[tomlewis]

So....I gotta ask. Why not just buy a Straddle. And then Gamma Scalp whichever way it runs? Because selling puts you at risk for Vega and Gamma.
This way you catch it which ever way it moves. and then Gamma Scalping covers expenses, Theta, etc.

[jeffha]

I've been using your strangles earnings strategy and it has worked out great so far! I used to avoid earnings like the plague, but your strategy is pretty effective.

[artsculturegroup]

How about turning it into an inverted Strangle? I tried that a few times and got out with small profits or a small lost. Want to know your thoughts on this management technic.

[gregs]

Dang dude, gonna have to watch this a few more times but I get it. I start a lot of positions from very tight condors and end up in this situation quite a bit. I usually rool up and out on the call side, but the buying/shorting the stock and then widening technique I have not done. Going to look at it! Good stuff.

[robertrobert]

Two quick questions:
1) do you usually use $.50 as your spread for your stop orders? (Have you experimented with tighter or looser spreads?)
2) have you discovered a way to have your hedges repopulate without manually resetting them (once you've been whipsawed out of them).
Thanks for the terrific content btw 😊

[hadassi]

You are great! Thank you for the great content you upload!

As to skillshare - can you please explain what is given there in comparisson to what you share through youtube?

[Decade]

Hi Scott, thank you for your videos. Quick question about taking profit for selling naked options.

Let’s say you’re in a weekly sell option trade. And your trade worked out and you’re up 40-60% which is your target.

Is it better to just take profit at that point or trim position and let some ride so decay can help us collect more. Or just keep holding and let more decay kick in.

I know it depends on the situation but is possible, is there a general rule of thumb for this?

Thank you :)

[יורםשרון]

Hello scott, i follow you layely and i realy like the way you hedge with stock but can we do it also with selling or buying futures?i guess its not 100% the same but we use much less money .

[יורםשרון]

Thank you scott, what i am checking right now is to make 5$ spread iron condor, and when any side is being tested, i am selling the second option of the tested side that originally was my protection and then buy or sell future, by that i collected big premium that can help to off set losses causing from the gaps of the stock .
Is it something traders do, do i miss something?

[tjhan]

Does your short call ITM ever get assigned or have risk of getting assigned?

[SimpleWhite]

Did you think about very close strikes strangle or even straddle and start defending with shares right away? It gives you a lot of premium to use for shares to jump through stop losses

[modo]

well, that's $16K in buying power you're talking there, and that's just one position.
Also, if you're gonna react every time the stock fluctuates around your strike, then you're actually losing money in the long run.
Instead, why not just close or roll your position, take a small loss and move on?
Also, how do you apply this strategy when the market opens against you by a margin on a Monday? Your limit order of 100 shares at $51.50 won't get filled. There's absolutely no guarantee that it will get filled.
I don't understand what you're doing there with all due respect. The WORST thing about options trading, particularly as an option writer aiming at collecting gamma and theta, is that you're bound to an open position that's gonna grill you every time the market goes against you. Your Deltas also get messed up; you need to make adjustments.
Also, what do you do in case you're bullish on the underlying and selling a naked put for premium? Now the stock tumbles and you're obligated to purchase a 100 shares of stock at the strike you sold. Are you gonna sell naked 100 shares for protection? lOl.
Maybe I'm missing something there, but hey! I'm enjoying your content. Keep up!
Best,

[SimpleWhite]

Do you still keep your hedge overnight?

[MrMasterNorris]

You need a real algorithm to automatically execute these trades to stay even