Delta Neutral Trading

[irishpaddypc]

Beeryboy, I dont mind what market or stock it is. I just want to improve my general learining on option stratagies. I am still paper trading with no market experience.
Any help from anyone will be greatly appreciated.
Thanks
Paddy

 

[beeryboy]

But what are you after? If you are good at 'guessing' market direction, then just trade futures and f*ck options.

If you aren't apt at that then think about what you want to do. Are you good at saying what will happen? Are you good at saying what won't happen? Are you good at saying something will happen but hasn't happened yet? Make up your mind, what the hell do you want to trade?

Delta neutral essentially says that I am sh!t at market direction, but I think that something will or won't happen (depending on long vol or short vol), you need some kind of skill in the markets otherwise why the hell should you ever make money?

Why do you expect to make money without being good at something?

What I basically want to know before I can help you at all is:

Why do you want to trade options?
Are you a fundamental trader?
Are you a technical trader?

If you can't answer any of the above questions because you have no experience then perhaps you need to decide what you want from the markets.

 

[wisestguy]

Hahaha.

wisestguy

You can expect a reply when you have something worthwhile to contribute.

yeah right . like I really care about your " reply " .

self flattery at it's highest.

 

[wisestguy]

But what are you after? If you are good at 'guessing' market direction, then just trade futures and f*ck options.

If you aren't apt at that then think about what you want to do. Are you good at saying what will happen? Are you good at saying what won't happen? Are you good at saying something will happen but hasn't happened yet? Make up your mind, what the hell do you want to trade?

Delta neutral essentially says that I am sh!t at market direction, but I think that something will or won't happen (depending on long vol or short vol), you need some kind of skill in the markets otherwise why the hell should you ever make money?

Why do you expect to make money without being good at something?

What I basically want to know before I can help you at all is:

Why do you want to trade options?
Are you a fundamental trader?
Are you a technical trader?

If you can't answer any of the above questions because you have no experience then perhaps you need to decide what you want from the markets.

who is this directed at ?

 

[bulldozer]

who is this directed at ?
=======================================================

Wisestguy,
Well I hope its not directed at you or me. :cheesy:
I think its directed at Paddy the new kid?

I think Paddy believes this is/was a thread on "Delta ntrl" ? Thats why he is posting here.
Perhaps you or any other can help Paddy? As I'm trying to keep out of this debate its not good for my blood presure. 😉

bull

 

[Profitaker]

Paddy

Maybe you should be more specific with your questions. What do you want to know ? What do you want to discuss ? Bulletin boards can be a useful resource, but you need to understand the basics before much of the discussion will make any sense.

 

[bulldozer]

Profitaker,

He made his questions very CLEAR i think!

He wants you guy's to show him 2or 3 exampls of a "DELTA NEUTRAL" trade with or without REAL prices, with all the LEGS and the xpiry dates etc.

He just wants to learn what they are and what profits/expances can be made after all adjustments to keep it at Delta neutral until xpiry.

Whats so difficult about that? Why are you giving the poor guy/kid a hard time???

He probably knows more about the "basics" than you give him credit for!!

 

[Profitaker]

bulldozer

I showed a worked example in post #69....How to open Delta Neutral, and how to make an adjustment when the underlying moves, there really is nothing more to it than that ! Therefore any more worked examples would be exactly the same and quite pointless.

As to the "profits/expances" as you call it, it depends on how volatile the underlying is - and therefore how frequently you need to adjust. If you're short volatility you want to adjust as little as possible - profits will come from theta (time decay). If you're long volatility you want to adjust as frequently as possible - profits will come from adjusting in the underlying.

Another factor affecting profits is how much premium was shorted (or bought) in terms of IV. Ultimately, the expected outcome over the long run is a function of IV over HV. Sell less IV than realised volatility and (in the long run) you lose. Sell more IV than realised volatility and (in the long run) you win. Volatility is everything in trading options.

Does that answer your questions Bulldozer ?

 

[bulldozer]

Prof,

Its not me asking the questions!! its Paddy.

I'm just explaining HIS questions to you! Its that simple.

Its not me you should reply to either! Its Paddy!!

I think he needs a bit more clarification thats all!! He is not up to your level of Knowledge on the "Delta ntrl" trade, risk/reward. [I'm complementing you here]

 

[wisestguy]

who is this directed at ?
=======================================================

Wisestguy,
Well I hope its not directed at you or me. :cheesy:
I think its directed at Paddy the new kid?

I think Paddy believes this is/was a thread on "Delta ntrl" ? Thats why he is posting here.
Perhaps you or any other can help Paddy? As I'm trying to keep out of this debate its not good for my blood presure. 😉

bull

I see . well i think I will leave the " advice " to regular options players .

my choice is leave options alone and use stocks and futures/indecies.

and easy on the old BP , eh .

 

[beeryboy]

bull,

I really had hoped you'd gone, but I don't think it's in your nature to leave it alone. From what I can see you know bugger all about options!

It would actually be a good idea if you listened and tried to learn about option trading as I think you may benefit and prolong your trading career!

Paddy,

My posts have been directed at you, you can't just want someone to tell you how to make money! Read #102, and decide what you want.

 

[irishpaddypc]

Beeryboy
Thanks all for your advise. So i take it you dont trade options [no offence intended]
I think Options are better for me because i know what my max loss will be at the outset of the trade. I can only lose the premium paid and no more than that.[long calls/puts]
Futures are too risky for me and too easy to trade, any fool can trade futuers with stops or trailers.
I prefer Options to futures, this is my choice. I want to learn all the different types of strategies and then i can chose the ones i feel confortable with. I thought a Delta Neutral trade was going to be easy to learn from you guys, but I'm finding it hard to get some sensable and helpful reply's.

Paddy

 

[bulldozer]

Beeryboy,"It would actually be a good idea if you listened and tried to learn about option trading as I think you may benefit and prolong your trading career!"
=====================================================================


I WAS NOT POSTING TO YOU!!! So dont post to me either! Get it!!

Your trading knowledge is to advanced for me! I'm not in your league 🙁
Just trying to learn from your vast knowledge. 😆 :cheesy:

 

[beeryboy]

Firstly paddy,

Learn to spell (no offence meant), it helps to get your ideas across more clearly.

Secondly,

I do trade options

Thirdly,

If any fool can trade futures, go do it and stop wasting time on the boards! Let us know when you're rich.

If you want proper advice, structure your questions properly.

 

[beeryboy]

bull,

read my post to paddy, the first point applies to you too.

 

[bulldozer]

ITS NOT THE SPELLLINGGS THAT COUNTS!! ITS THE POINT/QUESTIONS THATS MADE!

NOT ALL ARE PERFFECT LIKE YOURSELF 😆 :cheesy:

You dont have to be a genius to have common sence! but you need to have SOME common sense to be a genius and to understand misspelt sentences/points! 😆 :cheesy:

 

[beeryboy]

This is meant to be a thread regarding delta neutral trading, so let it be that way. If you want to teach paddy the a-z of trading go for it, but not here.

 

[irishpaddypc]

beeryboy,

Sorry about my spellings as I'm still at school [age 15] still learning.

I said any fool can trade futurs. What i did not say is that any fool can be successfull at it and become rich like you!!

 

[beeryboy]

Ok paddy,

still 15? My recommendation?

Get off the boards, go to school, get an education, go to a good university and get a highly paid job working for a bank, they will train you up with all the information you need. Don't waste your time learning from people who essentially might be complete idiots and/or liars.

Just my thoughts

 

[irishpaddypc]

This is exactly what my parents and I want [to go to school]. But it does not hurt to try to get some knowledge from the boards and experts like yourself does it? While I'm waiting to get older, cause U cant get in to Uni till ur 18-20 yrs old. The more knowledge I have the more advantage I will have to get in [Uni]

By the way U dont need to be good at spelling to be successfull in life! There are many millionaires that worse at spelings than me.