“We sold 20 calls and 20 puts.When the stock market collapsed on that day, not only did the putting soaring but also the call rise to a call due to the sharp rise in volatility, so the trade Included loss started to swell in both “
· The person who is profitable is correct and also the winner
From the perspective of financial engineering originally develops based on the theory of sheaths (Saya) such as different stocks, contract months and markets, and the core option transactions are also strategic and tactics centered around core strategy as a matter of course.
Therefore, its strategy / tactics involve absolutely theoretical content such as delta, gamma, price determination variable such as vegeta, time decay and volatility.
Even if you do not go to Gorigori like “solid traders”, you will not be able to control balls freely in the option market unless you learn even at the minimum level of these theories. However, because you are familiar with theory, it does not mean that you can win in the market.
Options are available for a few days, a few hours, a few minutes, in a short period of time, prices are multiplied by several, tens of times, sometimes hundreds of times (or vice versa, fractions of a dozen, A few hundredths) that was not found in any other transactions, from financial engineering.
Just saying that there is a theoretical side, price may fluctuate greatly in a short period for the time being, just “bold trader” who manipulates options as if dealing with individual stocks, futures and FX transactions, There is nothing wrong if you can earn with that.
Whether you are a “solid trader” or a “bold trader” as written in the previous issue, the way in which individual traders trade in is a matter of ten colors and there is a definitive way to generate profits I can only say that “the person making the profit is right and also the winner” is not done.
· Skillful use of optional characteristics
If the Nikkei average futures sharply rise and update the new highs, the call option premium will soar and the put option premium will collapse. If it is a strong upward trend of consecutive day rise, the volatility will expand, the call option premium surge will further accelerate, and the fall of the put option premium will be stopped.
“The Nikkei average option has options such as garbage of only a few yen rise sharply to several tens of yen · hundreds of yen in a short period due to the effect of price fluctuation and volatility of the Nikkei average futures and it has a value of several hundred yen There are cases where the option collapses to several tens of yen · several yen in a short period of time, and its possibility (opportunity) is more than thought ”
In this way, if you know from the beginning that option prices have the option characteristics to do such rough price movements, such things are commonplace events, so you can skillfully use the characteristics There is nothing wrong with anything in particular.
On the contrary, it is neither “solid trader” nor “bold trader” because it is touched the option without knowing these option characteristics (knowing it) without giving a big loss in option buying or selling . Since professional and amateurs, young people and old soldiers are placing money in the same table and playing a serious game, do not know the rules without knowing (knowing it) that it can not be helped to duck or nutrients or stupid I guess.
The option strategy that should be taken before or after the strong occurrence of the Nikkei average futures in the previous example is “using skillful use of option characteristics” is.
Thank you very much for reading to the end. Please look forward to the next issue.