21 min listen
80: The 3 Big Reasons Why Your Option Strategy Payoff Diagram Is Different Today Than At Expiration
80: The 3 Big Reasons Why Your Option Strategy Payoff Diagram Is Different Today Than At Expiration
ratings:
Length:
16 minutes
Released:
Jan 23, 2017
Format:
Podcast episode
Description
Show notes: http://optionalpha.com/show80 Your option strategy payoff diagram is an ever evolving and changing animal. Unlike stocks which have one-dimensional payoff graphs, either upward or downward sloping, and theoretically unlimited holding periods, option strategies are impacted by cubic pricing events. Namely, time decay (Theta), implied volatility (Vega) and interest rates (Rho) which can cause your payoff diagram to shift, mold, and bend as these additional pricing elements change with the market. In today's podcast, I want to help you understand how these three Option Greeks could have a significant impact on the way your payoff diagram looks now vs. at options expiration. In the end, I think it'll help give you more confidence and patience if you understand how option pricing works when holding positions that initially move against you but ultimately will turn out to be profitable.
Released:
Jan 23, 2017
Format:
Podcast episode
Titles in the series (100)
OAP 006 : If Every New Trader Did This 1 Thing They'd Make More Money: In this session of The Option Alpha Podcast I'll show you with real data why if every new trader was doing this 1 thing different they'd make more money. Plus I'll relate this to how why casinos have table limits because they know that limiting how... by The Option Alpha Podcast