parsifaltrading

parsifaltrading

Option Insights – Trading the Greeks Part 4 of 4: Time Value Trading and the Volatility Premium ________________________________________ Introduction to Time Value Strategies Time value strategies are among the most widely used option strategies. In their simplest form, these involve selling options, collecting the premium, and aiming to retain it—i.e., hoping...

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Option Insights – Trading the Greeks Part 3 of 4: Gamma Scalping Gamma Scalping is a trading strategy that combines long option positions with a hedging position in the underlying asset to isolate and profit from the convexity of options. It is essentially a non-directional swing trading strategy that aims to capture price swings—regardless of direction—by...

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# Option Insights – Trading the Greeks (Part 2 of 4) ## Option Convexity and Gamma Effects ### Gamma – The Convexity of Options Gamma measures how much the Delta of an option changes in response to movements in the underlying asset’s price. Mathematically, it is the second derivative of the option’s value with respect to the price of the underlying. In simpler...

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# Option Insights – Trading the Greeks (Part 1 of 4) ## Delta Targeting Options are often utilized by traders as a leveraged tool, akin to generating lottery tickets. By selecting the appropriate expiration time and strike price, it's possible to achieve significant leverage on an underlying asset, potentially yielding high profits in percentage terms, albeit...