Can anyone please help me on how can I use greeks mathematically to take a position. I have read Varsity and have some knowledge on the greeks… how they play roles to the option price… I’m not asking for the calculation to get the values of the greeks. I have subscription in Sensibull, and from there I easily get a collated data of the greeks. I attach a screenshot here for understanding. I want to understand how do I implement it mathematically to execute a decisive strategy…
Please help me figure out it.
The greeks cannot be used each on its own. In varsity there is advance option module where the various strategies that one can implement using options is explained. Have you read that?
In that the greeks applications are explained in depth. The more you read, and reread you will get to know the options better. Then take some imaginary trades, and see how the price action turns out. The more hands on you get, the better is your opportunity to learn.
Yea… I’ve read that one too and am using the strategies based on different market conditions like in neutral market conditions invoking iron condor and could estimate a range in which market may move applying Standard deviation theory (little improvised to suit my risk absorbing capacity), tallying with max pain… And getting results too… But sometimes feel very indecisiveness due to very less % of ROI. If I wish to take position little closer to spot price it definitely increases return but at the same time it increases the risk also… I don’t get confidence…
Now, I think to trade only expiry day to be more precise on the expiry price range, and get the advantage of margin benefits too… But premium also to get too little… Especially in nifty… However, being little confident on the expiry price range I can take position and let it to expire… That way I pocket the margin.
But if I want to trade intraday on other day, and invoke Iron condor, I have to square off my position when price can move in any direction increasing or decreasing the total value of my position even staying in between the price range I have taken my position. Since here is no concept of expiry I have to book profit or loss… So in this case I’m getting confused what should be appropriate that I can mathematically calculate everything to take position…
I think, I may have bored you, but very seriously and sincerely I’m learning everything on trading in this forum… Therefore, every piece of help is very precious to me… Expecting your kind help and support to be a confident guy… Regards…
Delta :- I use when I want probability in my favour with compromising risk and riward. (far otm strikes will have less delta but more win rate)
Gamma:- I use this to select expiry.
Theta:- I use this to increase my probability.(if my direction is not right(flat) or right, we get theta decay).
These are my take on Greeks.