Tag: vega

The Relationship Between Volatility & Vega

| October 7, 2019 | 0 Comments
The Relationship Between Volatility & Vega

Market volatility is starting to tick back up as macro headlines ranging from inverted yield curve to drones striking Saudi oil complexes to impeachment to failed IPOs have ratcheted up uncertainty and nervousness. And now we are about to enter earnings season which not only will cause big moves in the individual names but could […]

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Have Option Gamma Trades Taken Control Of The Market?

| July 15, 2019 | 0 Comments
Have Option Gamma Trades Taken Control Of The Market?

Back in my day as a market maker on the floor of the Chicago Board of Options Exchange (CBOE), the third Friday of the month was known as ‘gamma day.’ That was prior to 2005 when weekly options were introduced—to show my age, I was on the CBOE from 1991-2002—and ever since ‘gamma day, it has been a weekly occurrence. Actually, […]

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Options Trading: Is This The Ideal Environment For Calendar Spreads?

| October 3, 2018 | 0 Comments
Options Trading: Is This The Ideal Environment For Calendar Spreads?

In my trading, I usually establish positions with directional bias through the purchase of puts or calls.  This can provide the most leverage and biggest bang for your buck. That is assuming the move you predicted happens in a relatively short time and in a pretty orderly fashion. But as we discussed last Monday, the market seems […]

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The Dummies Guide To Option Greeks

The Dummies Guide To Option Greeks

There you are in a conversation with a professional trader about their strategy and suddenly the “inside baseball” terms start rolling off their tongue – Delta Hedging, Short Gamma, Theta Burn, and Vega Risk.  You smile and nod without perhaps knowing exactly what these terms mean, and just like that, what started as a good […]

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Option Greeks

| April 9, 2012 | 0 Comments
Option Greeks

Option Greeks are metrics used to more precisely understand the behavior of an option’s price.  In a nutshell, they measure the sensitivity of an option’s price in relation to several different factors.  Those factors include underlying stock price, interest rate, volatility, and time decay. Traders use Option Greeks to analyze changes in the price of […]

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