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Calculating Options Greeks That Matter: Delta, Gamma, Theta - Raj Malhotra

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  • Опубликовано: 14 авг 2024
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    Senior trading mentor Raj Malhotra highlights the common misconception that trading options needs to be too complex or sophisticated for the retail trader. Instead, Raj simplifies things by explaining options basics and the greeks that matter: Delta, Gamma and Theta.
    Presentation from ITPM London Super Conference 2017.

Комментарии • 79

  • @stonkscronks1999
    @stonkscronks1999 3 года назад +19

    Will have to watch this another 10 or so times, wine included.

  • @chico4661
    @chico4661 4 года назад +14

    I have been studying the stock market for years and just haven’t been in the correct financial situation to start trading. I am finally in a situation where I can and am rewatching all of these videos to refresh everything I have learned. Getting into ITPM mentoring program is my goal, once I’m a little more familiar with actually trading, I’m definitely gonna submit an application for it. Till then thank you for all the knowledge you all have shared for free!

    • @rustyray420
      @rustyray420 3 года назад +2

      Start small and get some experience while you're learning. Experience is the best teacher

    • @g.vareeentertainment6607
      @g.vareeentertainment6607 7 месяцев назад

      Yes, and don't use options at first, use shares. You'll lose less when you're wrong and it won't mess with your emotions too much. You can't have your confidence eroded to the point that you can't make decisions. You may have to stop. I did that, stopped for about 2-3 years, went back, and was successful starting from the 2nd year. 1st year was break even. 2023 was my best year ever... by far.

    • @Franzosenkoenig
      @Franzosenkoenig 7 месяцев назад +3

      so did you go to ITPM since your comment?

    • @whatsup-bw5vd
      @whatsup-bw5vd 5 месяцев назад +1

      Were you successful in taking the itpm classes ?

  • @aza1479
    @aza1479 4 года назад +91

    What are the chances I understand option trading? Me: 20 Delta.

  • @blahdeblahsion
    @blahdeblahsion 3 года назад +22

    This is legit hilarious and learned a lot at the same time. Exactly how it should be

  • @avitolourenco
    @avitolourenco 4 года назад +21

    Finally! Been waiting for this for a long time.

  • @jonasblom6177
    @jonasblom6177 2 года назад +5

    I LOVED the joke about the gyros! Keep up the good work man. You rock!

    • @jonasblom6177
      @jonasblom6177 2 года назад +2

      33:23 for those of you that don't follow

  • @emha9709
    @emha9709 4 года назад +24

    PTM Course is amazing to start with, It gives soo many information. i have never even read before about some of them. Now i cant belive ppl trade their money without knowing those things..
    ​Thanks @Anton Kreil, i hope i will manage one day to join Mentoring Program

  • @michaellamartina2403
    @michaellamartina2403 4 года назад +6

    good day gentleman. thank you for bringing hope back into my heart.

  • @michaelliu9576
    @michaelliu9576 4 года назад +14

    according to this video, from my understanding, the buyside traders tend to focus on predicting the underlying price move to design their trade while the market makers focus on the greeks to hedge the portfolio?

    • @wagzz3000
      @wagzz3000 4 года назад

      Correct, market makers are there to provide liquidity, therefore they have to hedge against all the crazy trades that the market throws at them.

  • @TheFeintOfHearts
    @TheFeintOfHearts 4 года назад +5

    36:06 - So let's say that there's a large open interest in call options at a certain strike price, a bit OTM. That means that the MM is short those calls, right? Which means in order to hedge their deltas, they are long the underlying stock. So if the stock moves past the strike price, moving those options to ITM, what does the MM do in response? Do they buy more stocks to rebalance their delta hedge, pushing the stocks higher? Or do they close the position, buying back the calls and selling the stocks, pushing the stocks downwards?

    • @wagzz3000
      @wagzz3000 4 года назад +5

      They dont actually have to buy stock, they can do a synthetic just by purchasing calls. Its usually a ratio x number of longs to hedge x number of shorts. By doing pure options you don't affect the stock price nearly as much as actually buying the stock outright. Market makers don't want to own stock if they don't have to.

  • @AnnAnother100
    @AnnAnother100 4 года назад +8

    Appreciate the free content, thanks guys

  • @michaelliu9576
    @michaelliu9576 4 года назад +12

    But still I think for retail investors learning fundamentals and technicals to come up with great trade ideas is even more important. As Raj said in the video, you always want more gamma when you open a position and be deep in the money when options expire, basically it means when yo have a directional view, you need to buy "not too far out of money" options and hold until it becomes deep in the money if your trade idea works out, as oppose to alot of beginners do, to buy very far out of money options and expect it to move only close to money everytime?

    • @bigthingsproductions
      @bigthingsproductions 3 года назад

      Pretty new to investing in single stocks, and very new to trading options. But what I assumed was a smart plan was to have directional plan in mind - say, stock X is going to potentially drop $15; buy a PUT spread significantly OTM for cheap - say, .15 on options with a $1 spread. So, in theory, I sell before expiration when it hits .45 or .30. -- While I've had some successes in this way, they have not yet been consistent. But I never thought buying options ATM made much sense. Will have to look more into this.

  • @johnjohnjohnh
    @johnjohnjohnh 3 года назад +5

    If I could pick someone to learn from, it would be Raj without a doubt. The tie between humor and the real shit is the perfect balance.

  • @Jdtjl
    @Jdtjl Год назад +1

    7:57 are both profiting due to different time horizons? assuming the profit is due to appreciation, not commissions

  • @getlucky8952
    @getlucky8952 8 месяцев назад +1

    I guess I need to grok some of this stuff, till it starts to make sense in my trading.

  • @krishputhamber6103
    @krishputhamber6103 4 года назад +2

    How to use gamma in select Strike price for options trading during volatility and range bound market

  • @ImCallingFromSpringfield
    @ImCallingFromSpringfield Месяц назад

    Love this guys sense of humour lol

  • @satyanayak8949
    @satyanayak8949 4 года назад +11

    The crowd is dead or dumb .....he had to crack jokes to keep them from sleeping

  • @ovan9114
    @ovan9114 2 года назад

    I can tell dude is legit the resume is beautiful 🤩

  • @bananarepublic8951
    @bananarepublic8951 4 года назад +2

    Great Video , Thanks lot Raj

  • @krazywally5685
    @krazywally5685 2 года назад

    Truly fascinating, thanks for posting this on YT

  • @andresbernal9890
    @andresbernal9890 2 года назад

    thank you for all the valuable information and knowledge. Looking forward to more videos. cheers

  • @jonwood1459
    @jonwood1459 2 года назад

    The best explanation I have come across. Thank you 👍👍

  • @alexhenke1979
    @alexhenke1979 3 года назад +1

    Great content! Thanks for sharing! I appreciate it

  • @rojasrojas8781
    @rojasrojas8781 Год назад

    Thank you! I appreciate you sharing with us this life changing knowledge.

  • @benjamindorsey2058
    @benjamindorsey2058 4 года назад +5

    ITPM is fuckkng ALWAYS legit!!!

  • @renatocammarino6331
    @renatocammarino6331 3 года назад +2

    Amazing content! Thank you

  • @idealizedlife820
    @idealizedlife820 10 месяцев назад

    Greek calculate is very easy example if one underlying asset delta value is 0.5 when your underlying price increases or decreases it will be calculated by 0.5 for each point moves so 0.5 will be increase or decrease from you premium

  • @registrateanything
    @registrateanything 3 года назад +1

    Good stuff Raj!

  • @Mathstrade
    @Mathstrade 2 года назад

    So grateful for a decent video on this thank you

  • @MakeYourOwnDamnMusic
    @MakeYourOwnDamnMusic 4 года назад +1

    Thank you, Raj.

  • @VideoBourse
    @VideoBourse 2 года назад

    Thank you for those informations 💡

  • @TradingWhat
    @TradingWhat 3 года назад

    Thanks a lot! Appreciate this free game!!

  • @murrowboy
    @murrowboy 4 года назад +2

    How do you buy stocks to hedge delta when it's constantly changing?

    • @joshua7225
      @joshua7225 3 года назад

      1 share = 1 delta. Thus, 100 shares cover selling 1 deep ITM call, and 1 deep ITM put covers 100 shares.

    • @murrowboy
      @murrowboy 3 года назад

      @@joshua7225 i know that. But do you know delta is constantly changing with the underlying? Yea, it's not possible to constantly buy and sell to negate delta as a retail trader.

    • @breakoutgaffe4027
      @breakoutgaffe4027 3 года назад +1

      @@murrowboy you would have to keep constantly re-hedging your delta, yeah. It's certainly possible for a retail trader, but you'd need a big account. Why do you want a delta neutral position anyway?

  • @DeclanOReilly
    @DeclanOReilly 3 года назад +1

    never short super models

  • @robbiemcghee5322
    @robbiemcghee5322 3 года назад +3

    Excellent 👍 Raj is hilarious 😆

  • @markgrift1917
    @markgrift1917 4 года назад +1

    Man this is cool stuff. Now I can study the greeks more and learn how to use them. After 2.5 years of daytrading I found out thats not the way to go. I must learn to trade like a pro using options. I ve read and heard that multiple times but now I am convinced. This winter will be option study.

    • @suspotato2499
      @suspotato2499 3 года назад

      You could leverage a lot with little capital if you know how to play options

    • @Franzosenkoenig
      @Franzosenkoenig 7 месяцев назад

      how did this work out for you?

  • @chewie1355
    @chewie1355 4 года назад +5

    Free Gyros by knowing Greeks. I get buy one get one by knowing theta and delta. Sorry Gamma, You can’t have the 🥭 mango

  • @registrateanything
    @registrateanything 3 года назад

    Where is this shopify options channel? Thanks

  • @dinshak86
    @dinshak86 2 года назад

    The extra layer of options in trading, I just don't get it what's happening here. 😢

  • @joachimschnur2563
    @joachimschnur2563 4 года назад +9

    Options are so sexy !!!

  • @Un-apostolo
    @Un-apostolo 10 месяцев назад

    i don't understand sir. 17:13 u say when option is deep in OTM the Gamma is smaller and 26:34 u say when theyre OTM Gamma is larger. but if Gamma move in relation with Delta and delta from ATM 0.50 goes to ITM 1, it implies more gamma to move from both part. em I right? is the same for Vega and theta in relationship with gamma?

  • @JonathanSebastian407
    @JonathanSebastian407 2 года назад

    Thanks hope I profit off them too

  • @darrenwendroff3441
    @darrenwendroff3441 3 месяца назад

    This guy is the Shane Gillis of options traders. He has the same cadence. Excellent excellent info tho, very insightful.

  • @austinlee9463
    @austinlee9463 4 года назад +5

    thank god people laughed at that Greek joke!

  • @soulful2665
    @soulful2665 2 года назад +2

    His name is pure Indian but he looks and speak like pure western guy

  • @clarkoliverjason
    @clarkoliverjason 3 года назад

    how much does this course cost?

  • @Flybrain-z3d
    @Flybrain-z3d 3 года назад +2

    I understand options. I suck at picking the right ones at the right time. FML.

  • @ivan_says_hi
    @ivan_says_hi 4 года назад

    Oh boy only 2 hours left to go!

  • @jstockton100
    @jstockton100 4 года назад

    amazing thanks

  • @martell4
    @martell4 Год назад

    WHO Care when vol goes to inf. that never happens n if it does yr getting forced liquidated / margin call etc LONG before vol goes to inf.

  • @drewmorg.
    @drewmorg. 4 года назад +8

    Was this at the end of the day or something? This audience is DEAD. They were all be very rich already to have the dull responses they have. Good Lord.

    • @wagzz3000
      @wagzz3000 4 года назад +9

      Its a bunch of newbs that dont know anything about options. They were given a fast run down of a fairly confusing subject, and are shy to speak up.

  • @Chhota_Py
    @Chhota_Py 4 года назад +1

    Wwwwwwwhay whay this video

  • @StevenSmith68828
    @StevenSmith68828 2 года назад

    The Greeks sound like multiple derivatives of a function. How have I not notice that lol wait are these things based on actual formulas.

  • @zc7662
    @zc7662 3 года назад

    this guy reminds me of Anton Kreil ngl

  • @josephwallace7287
    @josephwallace7287 8 месяцев назад

    None of this matters with dark pool trading in effect.

  • @exploringavenues2269
    @exploringavenues2269 4 месяца назад

    That was teaching too big of a chunk. You can see most of the students were lost.