Mar 27, 2019
OPTIONS 101
Iron Flys vs. Iron Condors
What is an iron butterfly? What is an iron condor? Why/when would you use each? Why/when would you not use each?
THE BUZZ
Recent market recap: The rise & fall of volatility
Earnings volatility breakdown.
Alternative strategies to capture alpha in volatile markets.
OFFICE HOURS
Question from Andrew Dodson
- Let me see if I have this straight re: delta hedging or
“gamma scalping” - even though I’m not sure why it’s scalping gamma
and not delta. Let’s say you buy a straddle with a long 10 delta.
Then the underlying rallies 1 point so you sell 10 shares to make
yourself flat again? Then you wait to see if the underlying drops
again so you can buy back those 10 shares at a point lower? Is that
the gist of it? What do you do if the stock continues to rally and
you continue to get long deltas? And why the heck isn’t it delta
scalping?If it was gamma scalping you’d be hedging the rate of
change of your delta over that 1 point swing in the underlying?
Question from Keving - Why doesn't anyone put out
the earnings straddle analysis similar to the analysis from the so
called analysts? Then we can all fixate on whether a name
outperforms its straddle as opposed to beating the whisper number.
I think that's more valuable. Why don't more people know about this
stuff.