Discover and read the best of Twitter Threads about #Vega

Most recents (3)

#Straddles vs #Strangles ( Sell only )

These are the most common #Options strategies when one would start with #OptionsTrading.

Let’s understand from a broader perspective what’s the difference between these two.
Would not like to discuss the construction difference between them if you don’t know stop trading #options

#Straddles

You get higher premium so pnl would be higher compared to #strangles

But from where are you getting higher premiums is that your selling 0.5 #delta.
So probability of one going wrong is always 50% so to simply put one side is goin to get stuck in a #straddle but then market tends to #flucuate a lot so there is always the case of #meanreversion if you have selected the #strike rightly.
Read 14 tweets
#Option #Greeks Simplified

#Options are definitely more complicated than equity or futures.

Their prices don’t just go up and down.

They also fluctuate based on things like #time, #implied #volatility and #underlying stock movements.
#Options #Greeks Are Simply Mathematical Shortforms

Most of you would remember from school that mathematical formulas sometimes were #Greek letters like Pi and #Delta. The same is true for options.

Don’t let them overwhelm you or scare you.
They’re simply #mathematical words to explain some very basic principles.

#Greeks Describe the Behavior of #Individual #Options

Each #greek can help predict how it will behave under different circumstances and how options prices would change.
Read 22 tweets
Option Greeks : Myths and Realities

Option Greeks estimate how an option's price changes with ::
1.Underlying stock price : #Delta and #Gamma
2. Interest Rates : #Rho
3. Volatility : #Vega
4. Time : #Theta
#Myth : Greeks are what make up an option's price

#Reality : Greeks explain what can happen to an option's price
#Myth : The greeks are timeless, they never change

#Reality : Greeks are ever changing, what they show now will change in the future
Read 9 tweets

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