Hi, As the market is too low, the options prices are too high and Im worried to trade options at all. Call options gives me negative results even when the market goes appropriately. How to eliminate the effects of Vega? So that I can trade without worrying about the vola coming down?? I tried selling Calls OTM along with buying ATM Calls. But sold calls lose more than Bought calls earn. I used zerodha calculator to find the delta, vega,theta and placed the buy-sell call pair as if theta and vega gets cancelled leaving the BUY CALL the delta majority. I think I need to experiment more to get this right. But I thought to get some advice. Anyone tried to eliminate Vega (and theta possibly) and succeeded?? What happens when the spot price moves closer to the sold CALL? Is complete Vega hedging possible? Thanks.
With ViX contracts available you can completely hedge Vega. Hedging Theta is not practical as its cumbersome.
Have you read about the Greeks here ? - http://zerodha.com/varsity/module/option-theory/