Add training workflow, datasets, and runbook
This commit is contained in:
@@ -0,0 +1,19 @@
|
||||
Managing Multiple-Class Risk
|
||||
Most traders hold option positions in more than one option class. As an
|
||||
aside, I recommend doing so, capital and experience permitting. In my
|
||||
experience, having positions in multiple classes psychologically allows for
|
||||
a certain level of detachment from each individual position. Most traders
|
||||
can make better decisions if they don’t have all their eggs in one basket.
|
||||
But holding a portfolio of option positions requires one more layer of risk
|
||||
management. The trader is concerned about the delta, gamma, theta, vega,
|
||||
and rho not only of each individual option class but also of the portfolio as a
|
||||
whole. The trader’s portfolio is actually one big position with a lot of
|
||||
moving parts. To keep it running like a well-oiled machine requires
|
||||
monitoring and maintaining each part to make sure they are working
|
||||
together. To have the individual trades work in harmony with one another, it
|
||||
is important to keep a well-balanced series of strategies.
|
||||
Option trading requires diversification, just like conventional linear stock
|
||||
trading or investing. Diversification of the option portfolio is easily
|
||||
measured by studying the portfolio greeks. By looking at the net greeks of
|
||||
the portfolio, the trader can get some idea of exposure to overall risk in
|
||||
terms of delta, gamma, theta, vega, and rho.
|
||||
Reference in New Issue
Block a user