Options Casino

Options Casino TRADING options

0DTE: 530 SPY call exp today up 2900% then down 85% in 15 minuteschaos is like train cancellations during heavy rain and...
07/04/2025

0DTE: 530 SPY call exp today up 2900% then down 85% in 15 minutes
chaos is like train cancellations during heavy rain and cyclone

09/02/2025

Diagonal spreads are one of the most versatile options trading strategies, offering a mix of directional exposure, time decay benefits, and volatility advantages.

02/02/2025

Option sellers... selling a one standard deviation equates to roughly a 16 delta for a call or put. There is an 84% chance that the stock will stay within that strike, as per option pricing. But the truth is that markets generally "underrealize" option pricing - which in English means options expect too much movement on balance.
So selling options is like being the casino, right?

17/12/2022

You only understand gamma if you’ve been short.In trading, gamma is a measure of how much an option's delta changes in response to a change in the price of the underlying asset. High gamma options are more risky and potentially more profitable, while low gamma options are less risky.

I understand that it’s the second derivative of the option price wrt the price of the underlying,

Patels exhaustion strategy
26/10/2022

Patels exhaustion strategy

17/09/2022

Long option trading position sizing should be based on maximum loss as they can go to zero. Stop losses are rarely practical and most should be all or nothing trades.

Theta gang always wins $VIX Call open interest >40 is at record highsYet VIX hasn't moved much
23/07/2022

Theta gang always wins

$VIX Call open interest >40 is at record highs

Yet VIX hasn't moved much

30/06/2022

Oversimplifying but

Option value is derived various forms of risk exposure

Directional risk (delta) is one

When you hedge away (or neutralize) delta, you're exposed to the remaining risks (e.g. volatility)

You get paid/punished for being exposed to these risks as time passes

11/06/2022

I know it seems too simple, but I avoided all of the large market down-trends since 2000 with a few rules like those in the chart. I also look at whether the 30 week average is rising or falling. Here is SP500 at the recent top and the 2000 top and bottom in 2003.
was picking OTM weekly options.

Yes they can result in big gains

But most of the time, it ends with choppy price action that leads to 50% loss because of decay

Here's how to fix it:Swing Trades:
- ITM/ATM
-2-4 weeks Minimum

Day Trades:
-ITM/ATM
-1 week out

Scalp Trades:
-OTM
-Weekly

15/05/2022

An introduction to how market makers delta hedge their gamma and vanna exposures and the effect it has on price movements.Uploaded with permission from Squee...

Some nerds with no social life go even further and don’t want to bet on mean, variance or skew, but instead want to bet ...
15/05/2022

Some nerds with no social life go even further and don’t want to bet on mean, variance or skew, but instead want to bet that the width of the distribution might be thin at the middle, but wider near the ends. This is done being short vol near the middle of distribution and being long vol near the tails. The relative widths of the distribution near the middle vs the tails is the 4th central moment, which we call kurtosis.

We can get even fancier by saying we think that we total variance of the distribution might not necessarily change, but...
15/05/2022

We can get even fancier by saying we think that we total variance of the distribution might not necessarily change, but that one side of the distribution will get wider but the other side gets thinner, that there will be a difference in the relative widths on either tail.of the distribution. This is achieved by going short vol on one side of the distribution and long vol on the other side of the distribution, delta neutral. The difference in relative areas of the tails on either side of the distribution is the 3rd central moment, or Skew.

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