Implied Volatility
Is my current focus when trading options. I came to options trading, as I imagine many do, solely focused on delta and direction. Ha! As I didn’t papertrade first, unsurprisingly, I lost money immediately. For me, having “skin in the game” forced me to pay attention, but I’d strongly advise anyone interested in options to papertrade first! Gamma is certainly exciting, and one day I will screen for that more, but my account is too small (for now!) I also don’t really need to hedge and unlimited loss is a non-starter, so I never write options. One must keep an eye on theta - time waits for no one, and can kill the value of the luckiest wager. 0DTE’s are cheap, but because of theta, really an all on red or black proposition. Vega grants opportunities to profit no matter direction and as such is my go to Greek. Finding low IV options on sale is a boon, especially for inexpensive equities that I hold already. I have found Moo Moo lessons very helpful. I also got an inexpensive used book meant for beginners - it has helped me to ho back to the start as I had misconceptions. Also, other users here have been kind and helpful. And users on Reddit are the best! Since those communities allow for anonymity and the userbase is open and forthcoming, others have guided me through strategies step-by-step. I’m excited and eager to get better and am NOW papertrading in anticipation of using the powerful leverage of options to boost my CAGR. At the moment I hold a few LEAPS, inexpensive and long off, so the Greeks aren’t breathing down my neck :).
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It’s a beautiful day!
Former scientist, enthusiastic reader and student of capital markets. LT/s-trade/options/crypto
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