Trying to get my mind wrapped around the greeks, and was wondering .... how do I think of negative theta, negative gamma, negative delta and negative vega. What does all of that do to the price of my option? I understand delta, vega, gamma and theta on its own, so more trying to understand the "negative" and what it does to my price. Thank you!
My advice would be to forget the Greeks entirely. There worthless. I'm sure this will fly in the face of at least some here. But I'm still waiting for anyone to prove otherwise.
You make a statement that flies in the face of conventional wisdom. The onus is on you to prove your case.
From the portfolio's perspective: Delta : long call is positive, long put is negative; vice versa for short call and short put. Gamma & Vega : long option is positive, short option is negative. Theta : long option is negative, short option is positive.
Then a link shouldn't be too hard for you to produce. Of course, this is assuming you aren't a troll or an idiot.
First, let me give you some advice since it would seem your very young and/or naive. When in a debate and your opponent starts calling you names.... You've won. Second, some history. I started trading the markets in 1975. I became a broker in 1981 and got my series 4 (Registered Options Principal) license in 1982. Series 15 in 1985. Over the next 17 years I dealt with clients and supervised the option trading activity at several firms for hundreds of brokers. Worked on the trading desks and in compliance. By 1998, I worked at the largest online broker working with high net worth, active trader clients mostly in options and got my Series 9 & 10. In 2006 I move into the back office IT financial services area writing functional requirements for both the front & back end systems for option trading & margin optimization. Like most aficionados of options, I also studied the B&S model, the Greeks, The Binomial Option Price Model, and read all the books. I know at least enough to write the formulas into a spreadsheet w/VBA and computer code in two languages. In over 3 decades in the business I've seen those who bought the latest books or the latest software, attended the option seminars and paid out big bucks for Wade Cook, Star Traders, Optionetics, Online Trading Academy, paid for the latest Hot Newsletter or subscribed to this or that options guru pre-market squawk. In all that time and all those trades and traders not once, NOT ONCE did I ever see anyone make profitable trades based on their complicated math or strategy suggested by the Greeks. My own studies over considerable time showed little if any value for the effort. So why is it out there...? There's certainly lots of money to be made by promoting to the great unwashed masses the idea that the Gamma Scalping Delta Neutral Long Vega Short Theta Rho anticipating Broken Wing Condor Calendar Spreads is the road to riches. I posted here on ET a detailed daily analysis and used the Greeks as calculated from an online source (CBOE so as not to be accused of using bad formulas) over a few months time. Only rarely did the theoretical values ever come close to the real world. My post provoked a fare amount of flack then also. (I tried to find it, but it must have dropped off by now) So I solicited from those touting the merits of the theoretical models to "show me". And just as in the past decades, my challenge yielded no response. So I must come to the same conclusion, those who advocate the virtues of the theoretical models fall into two categories. Those trying to sell you something, and those that are just option trader wannabes who get some artificial kick from spewing out intellectual sounding terms to the great cyber unknowns in hopes of boosting their ego. So, for anyone out there.....If you think I'm completely wrong..... I don't know what I'm talking about... or I've failed to learn anything about options after decades......then "Show Me"