Thread by @astocks92

🧵 How I mastered 90% win rate option trading.

DJ Khaled - They don’t want you to win.

Success is not given overnight , it is a mindset.

Basic overview, strategies & guidance , most common mistakes!

Education ⬇️

Gamma: (GEX) , which is a dollar-denominated measure of option market-makers' hedging obligations.

Things to remember/bookmark:

▪️High GEX env = lot of hedging needed = liquidity is added(+ GEX) or subtracted (- GEX)

▪️+ GEX = + gamma = Long calls go 1.0(delta) as they… twitter.com/i/web/status/1…

Delta: Measurement of change in option price as stock moves ⬆️ or ⬇️

▪️Between -1 and 1 for every option
▪️-1 to 0 for Puts
▪️0 to 1 for Calls
▪️More “in the money” the strike moves to option, more value it gains, closer it gets to -1 for Puts or +1 for Calls
▪️>90% options… twitter.com/i/web/status/1…

Theta: ⏱️. Think of it as time

▪️ Represents the risk of time and the loss of value of an option
▪️Not linear!
▪️Factors that influence it to change: IV , time to expiry, strike price
▪️”When you hear swing traders say I bought 6-8 weeks out, 2-3+ months”- They are buying time

Vanna: second-order derivative that measures the change in delta for any change in the implied volatility of an option!

▪️Vanna tends want be “0” or close to highest value interest - as IV changes & hedging occurs throughout 0DTE options and others
▪️0DTE swings vanna daily.… twitter.com/i/web/status/1…

IV strategies:

▪️HIGH IV- sell options (calendars, spreads, condors). Collect theta (premium) in your favor

▪️Low IV- buy OPTIONS with time for hedges. Less delta impact , & if IV up- works in your favor if direction is correct.

@AlphaPicks : Great IV strategies & threads.

My A+ setup parameters

▪️Gamma environment stable- NOT (+/- flip) intraday
▪️Vanna target identified and stable (IE 1 price and growing)
▪️IV skew(decrease or increase) consistent
▪️Bullish/Bearish environment consistent across #IWM #SPY #QQQ
▪️Option selling 1st hour… twitter.com/i/web/status/1…