Trading with Krugman

Discussion in 'Journals' started by krugman25, Jan 5, 2019.

Thread Status:
Not open for further replies.
  1. sle

    sle

    Sorry, what's the statement you are trying to make?
     
    #41     Jan 6, 2019
  2. krugman25

    krugman25 Guest

    A response to your question about a delta neutral portfolio outperforming a trending market.

    The statement is in the post.
     
    #42     Jan 6, 2019
  3. 4 real, I'm embarassed for myself.
     
    #43     Jan 6, 2019
    krugman25 likes this.
  4. krugman25

    krugman25 Guest

    Dang, no laughing smiley's. This will have to do. :D:D
     
    #44     Jan 6, 2019
  5. sle

    sle

    Did I ask that question? :p

    On a serious note, delta-hedging a portfolio in a trending or a mean-reverting market is Options 201 (advanced, but not too advanced). However, it does become a very advanced once you start thinking about the dynamics of the implied volatility as a function of the underlying trend.
     
    #45     Jan 6, 2019
    Flynrider and krugman25 like this.
  6. How can you only risk 1% if you keep rolling losses until theta makes you whole?

    Also, it seems like you're doing way too much at the same time, but you seem like a smart dude and I know smart dudes make lots of money in the markets :D
     
    #46     Jan 6, 2019
    Nomad Trader and krugman25 like this.
  7. krugman25

    krugman25 Guest

    True and it is more complex than you are describing. It involves all of the greeks and their derivitives.

    So I will reiterate what I said. I can't answer your question because it is too vague. It depends on *how* the portfolio is achieving delta neutrality. There are millions of strategies, variations and combinations that can all be "delta neutral". All will have different profit and risk profiles, different greek behaviors.

    I would love to run a few million combinations for you and tell you your answer, but i'm just a guy with a journal. :cool:
     
    #47     Jan 6, 2019
  8. krugman25

    krugman25 Guest

    Not a smart dude, I just play one on T.V. lol.

    Risking 1 percent is for price action trading, not short options trading. You are conflating the 2 things.
     
    Last edited by a moderator: Jan 6, 2019
    #48     Jan 6, 2019
  9. I'm not smart enough to know, but feels like there's a blowup waiting for you somewhere with this approach.
     
    #49     Jan 6, 2019
    Nomad Trader likes this.
  10. krugman25

    krugman25 Guest

    If my deltas get out of hand and I overleverage on correlated positions, without a doubt it will be waiting.
     
    #50     Jan 6, 2019
    Flynrider likes this.
Thread Status:
Not open for further replies.