What is your Trigger?

[Quantus]

what do you mean by "neutral"? Do you mean:

a) lack of movement, in which case you seek to profit from theta decay, or

b) significant movement, but in either direction, in which you would seek to profit from the increase in Gamma.

For the benefit of t he other ladies and gentlemen reading this, Theta and Gamma work in opposite directions. In (a) Theta is your friend and Gamma is your adversary. In (b) it is reversed.

[BlueLou]

Bob, at a certain level "who cares" might be the right attitude. yet saying you trade 5 lots without a concern for the probabilities is like saying "when i go to vegas i limit my wagers to the $1 slots so who cares what the odds are." if you are in the market for entertainment or blowing off steam or anything else besides making money i'd say being aware of the odds are irrelevant (and i'd also say "please take the other side of all my trades"). i'd turn around your "who cares?" question and ask if you know any single poker player that consistently wins and doesn't know the odds. it's the same with this game.


knowledge is power and knowing at least a little bit about where options' profitability comes from - and to me it doesn't come from "guessing right" as much as it comes from trading to capture probabilities - is essential.