Options Spreads- Option Trading Strategies Video 34 part 2



Go to http://ExpertOptionTrading.com/videos for more free videos on Options Spreads Let's take a look at the slices. I'm going to go up a dollar. I'm going to go up $2, and I'm going to go up $3. We are currently long 405 Deltas, so we need to sell 400 shares, as soon as we open this position. Let's go in here, and we're going to sell 400 shares. We'll bring that over to the Analyze tab. That brings us to a Delta-neutral position. Now, if it goes up a dollar, we will be long 178 Deltas. If it goes down a dollar, we will be short 194 Deltas. If it goes down, then we can sell some of the shares that we purchased on the open, to be Delta-neutral here. Let's see what the current stock price is. It's at $36.74. We are buying the $35 straddle. That's how we are going to enter our order. We're going to buy the straddle, and we're buying 10 contracts. We are selling 400 shares of stock. The last thing we want to do is take a look at the chart again, and see exactly where the stock is, and where it has been. It's very interesting. We had a pretty good run up here, in the morning. It looks like there were ample opportunities, over the last 20 days, to trade this stock. Hopefully, this will be a winner for us. It looks like the shares are easy to borrow. That's what we're looking for. Let's give it a shot. We'll make sure that we are Delta neutral here, with the current stock prices. It looks like we are. The only thing we need to do, then, is just to make sure that we can get the straddle. We are going to try the straddle first, and then the sequence. In the sequence, we are going to sell 400 shares short of the stock. It says "Easy to borrow," so hopefully, we'll be able to get this position on. In our worksheet, all I did was make a notation that the Netflix was hard to borrow, and the AVP was easy to borrow. That's the one that we have selected to do our trade. Now, we're just waiting for this to be entered. Hopefully, we'll be able to get our straddle at the mid-price. Let's keep an eye on the chart, and see where we are. It looks like the price is just hanging around, right around $36.73. Hopefully we'll be able to get our price. If not, we'll wait a couple more minutes, and we will go ahead and replace that order. We'll cancel that order, and replace it with another order. We just got filled. Now they are working on our short order. Unfortunately, the price has moved. Now, we need to do 375 shares. We have the straddle. Let's get rid of that. Let's see what we need in order to get Delta-neutral here. We're going to be slightly long Delta here. If we take a look at the chart, the price has come up a little bit. Let's go ahead, and go to our Analyze tab. In order to be pretty Delta-neutral, we need to sell 390 shares here, instead of 400, at the current price of $33.65. We'll just go ahead and do that, and enter that order. We sold it. We now have a Delta-neutral position. We are short 390 shares. For more Options Spreads videos be sure to check out our channel: http://www.youtube.com/user/howtotradeoptions To learn more about the Expert Option Trading course go to: http://ExpertOptionTrading.com Additional Tags ================ vertical spreads, options greeks, what is options trading, option volatility, option spreads, options volatility, how to trade in options, option strategies, index options, equity options, virtual trading, options spreads, virtual options trading, options trading tutorial, option trading strategy, options trading course, how to trade stock options, options trading systems, options training, learning options, learn to trade options, option trading tutorial, options trading strategy, option trading course, option trading systems, options trading basics, option trading basics, option trading system, options trading courses, options trading training, trade options, what is a stock option, options strategies

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    Visibility: 1297

    Duration: 9m 57s

    Rating: 1