21 lines
1.4 KiB
Plaintext
21 lines
1.4 KiB
Plaintext
ultimate trading success. Knowing which option strategy is the right
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strategy for a given situation comes with knowledge and experience.
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All option strategies are differentiated by their unique risk characteristics.
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Some are more sensitive to directional movement of the underlying asset
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than others; some are more affected by time passing than others. The exact
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exposure positions have to these market influences determines the success
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of individual trades and, indeed, the long-term success of the trader who
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knows how to exploit these risk characteristics. These option-value
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sensitivities can be controlled when a trader understands the option greeks.
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Option greeks are metrics used to measure an option’s sensitivity to
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influences on its price. This book will provide the reader with an
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understanding of these metrics, to help the reader truly master the risk of
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uncertainty associated with option trading.
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Successful traders strive to create option positions with risk-reward
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profiles that benefit them the most in a given situation. A trader’s objectives
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will dictate the right strategy for the right situation. Traders can tailor a
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position to fit a specific forecast with respect to the time horizon; the degree
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of bullishness, bearishness, neutrality, or volatility in the underlying stock;
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and the desired amount of leverage. Furthermore, they can exploit
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opportunities unique to options. They can trade option greeks. This opens
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the door to many new opportunities. |