I like to think of delta and gamma as speed and acceleration: Delta = the current rate of change - similar to speed (m/s) Gamma = the rate of change of delta, similar to the change in speed I.e. acceleration (m/s/s)
Options traders are on a wide spectrum; you have your risk-averse people who only write covered calls on blue chips, and then you have the people who buy dirt cheap short duration OTM calls/puts on meme stocks haha
That is a quite advance topic. It uses the Black - Scholes model. But this dude is really really good explaining complicated topics in pain english so yeah, that would be nice!
Awesome video. The most intuitive understanding I ever seen. Remember that I deal with greeks at my university when we studied mathematical finance at our master program. Thanks for your Awesome video
Newbie here, I bought a Call Option that expires in a year and half. All the Greek values are zero with the exception of Delta which is 1.00. Why did the contract drop in value the next day even though the stock price is the same. My P/L dropped 35% and the stock price is still the same from when I bought it. If I have a Theta decay of 0 why is the price changing so drastically next day?
Super helpful video! I've heard the term before in my current job, but since I work on the tech side of finance, I didn't really know what these different measures meant.
Delta curve graph would have been helpful in my opinion, to show the effect of gamma; and a theta curve graph to show that it’s non linear. But anyway great video.
The rise of stock options has also rose the average level of the VIX. I also saw a study that said the more attention a stock gets in the news and social media, the higher it's implied volatility will be relative to its realized volatility.
Yeah that makes sense since more media attention for a given security generally leads to more interest in retail trading in that security. Since retail trading isn't the most sophisticated (to put it politely), there will undoubtedly be more volatility for the security in question.
I really do have a question. For someone with less than $5,000 to invest, how would you recommend we enter the market? I am looking at studying some traders and copying their strategy rather than investing myself and losing money emotionally. What’s your take on this approach?
I've been trading by myself. I'm not really happy with what's going on, just few weeks ago I lost about $7,000 in a particular trade. Can you help me out or at least advise me on what to do?
would it be safe to say that buying options in the evening is a bad idea overall if planning to day trade due to daily theta pretty much almost up? also on fridays in the last couple hours of the day and a theta of lets say .15. would i be pretty much underwater of .45 cents being that weekend theta loss aswell as fridays is working against me?
Can they be used to filter and find good options to trade? Anyone knows any tools or guide lines on how to use Options Greeks for entering a trade either long or short? Kind of what values to look for in each or all of them to enter or exit a trade?
Great Video! Covered calls are my favorite! On long positioned stocks. I don't care if I'm locked in a losing position that I believe in. If you sell a cc and the stock rises, you may lose on a portion of the gain. But, time is on a person's side more often than not when writing CCs with short expiration dates.
Thanks for the work done on the video, I want to be an investment analyst, could you recommend me some books to be more efficient when analyzing companies? I'm still 17 years old but you know what they say the faster you start the better
In the video he says "not actually a Greek letter" I guess because it describes volatility the name vega stuck around because it's more familiar to English speakers than saying "ni"
You should know: every time you say 'We don't have time for' relating to a deep dive, we do have time! I, and I suspect many others, would stick around for long form educational content. Make something 30 minutes long or more. See what happens ;)
I have a question. What if share fall to 0!! And how can we say with guarantee that strong fundamentals wouldn't fail or wouldn't go to zero. Why? Is there any reason why? Could you please answer my question
The only way a stock goes to true zero is if the IPO was a scam or if a bankruptcy court cancels shares in order to pay bond holders with the liquidation money. Why? Because being at zero means that no one would even pay a dollar for all the shares in existence. As for ordinary companies, if a stock price falls too low, a computer will see the opportunity and automatically buy it up before you can even open the ap and see the problem. The guy using the computer isn't worried because he knows even if a company is liquidated tomorrow he should get a fair payoff if he bought at a good price.
When the option moves less in price then the stock with a delta between 0 and 1, why would someone choose to invest in the call option rather then the stock? Are the price of the options much lower, so that the profit comes from buying 100 options at the same price as 1 stock, so the smaller movement ind the price of 1 options multiplied by the number of options makes is profitable? I have never bought or sold options and I don't plan to. I'm just curious how they work.
It's may seem a bit misleading but since an option controls 100 shares of a stock we have to multiply that return on the option price by 100 to get the real return. Using the example in the video where the option increased in price by .20c when the stock moved $1, that would actually make your entire option worth $20 more! This is known as option leverage and it's why when investors are relatively confident about which way a stock will move, it can make options more desirable. This leverage goes both ways however so it common to see options traders lose their entire position if the stock makes an undesirable move. It's a bit complicated but I hope that makes sense! :) Edit: missed a zero
Yep it's because purchasing options creates a lower drag on cash compared to buying the actual shares at the current market prices. The idea is that you would have the required money available by then.
Four Economic sectors. Primary, Secondary, Tertiary, Quaternary. Is there a chart or website or channel, that breaks down WHAT time of year each sector is at its strongest? As well as a chart that shows historical data Year by year for each sector performance?
![I.N "HALLUCINATION" | [Stray Kids : SKZ-PLAYER]](http://i.ytimg.com/vi/n5B5q1Hwt_U/mqdefault.jpg)
this background is actually pretty easy on the eye.
I like to think of delta and gamma as speed and acceleration:
Delta = the current rate of change - similar to speed (m/s)
Gamma = the rate of change of delta, similar to the change in speed I.e. acceleration (m/s/s)
Theta = gasoline
That's precisely what it is. You actually need calculus in order to chart the gamma of a given security.
That helps, thanks!
I think we're doing pretty good with Greek letters at this point in 2022 lol
Is this a covid joke?
@@Quroe_ It is indeed
@@Quroe_ No it’s an alpha, beta, sigma male joke
I love that you went back to the background. It looks so good.
Everyone: why New dumbhell NFTs are soaring today? [cringe face on the thumbnail]
PLAINBAGEL: THE GREEKS
This channel is gold
I will go out on a limb here and say that most options traders I've met don't know much about "the greeks". :D
You're meeting the wrong ones
Options traders are on a wide spectrum; you have your risk-averse people who only write covered calls on blue chips, and then you have the people who buy dirt cheap short duration OTM calls/puts on meme stocks haha
The best, most concise explanation I've seen. Thank you.
Would love to see a video on how implied volatility is calculated
ruclips.net/video/VIHldsSmASU/видео.html
That is a quite advance topic. It uses the Black - Scholes model. But this dude is really really good explaining complicated topics in pain english so yeah, that would be nice!
Awesome video. The most intuitive understanding I ever seen.
Remember that I deal with greeks at my university when we studied mathematical finance at our master program. Thanks for your Awesome video
Finally - I've been waiting for this.
Wonder what took you so long! Thank you ❤
Excellent video!
Thank you for making these
Amazing video as always!
Newbie here, I bought a Call Option that expires in a year and half. All the Greek values are zero with the exception of Delta which is 1.00. Why did the contract drop in value the next day even though the stock price is the same. My P/L dropped 35% and the stock price is still the same from when I bought it. If I have a Theta decay of 0 why is the price changing so drastically next day?
Great video thanks , so well explained
Thank you for another informative video
I always find it funny that the symbol for Vega is actually called ni in Greek and more closely resembles n in sound.
Source: I'm Greek
Suddenly Rho has become soooo important.
Super helpful video! I've heard the term before in my current job, but since I work on the tech side of finance, I didn't really know what these different measures meant.
Exactly what i needed
One tiny correction, not to the substance but to your sponsor message- "Deutsch" means German, not Dutch :D (Dutch in Dutch is "Nederlands")
Meme material at 6:49 with good pause timing.
Good explanation and I loved the puns! lol
Delta curve graph would have been helpful in my opinion, to show the effect of gamma; and a theta curve graph to show that it’s non linear. But anyway great video.
Actuaries seeing this video are all getting excited
Lmao😂
Anyone please recommend a regulated option broker (with low fees) accessible to South Africans? Been failing on my search.
Thank you! This will help me with my options plays.
The rise of stock options has also rose the average level of the VIX. I also saw a study that said the more attention a stock gets in the news and social media, the higher it's implied volatility will be relative to its realized volatility.
Yeah that makes sense since more media attention for a given security generally leads to more interest in retail trading in that security. Since retail trading isn't the most sophisticated (to put it politely), there will undoubtedly be more volatility for the security in question.
So traders wanted to use first and second derivatives but gave them complicated-sounding names, and they renamed nu to vega because it looks like a v…
THANK YOU! FINALLY!!!!
I really do have a question. For someone with less than $5,000 to invest, how would you recommend we enter the market? I am looking at studying some traders and copying their strategy rather than investing myself and losing money emotionally. What’s your take on this approach?
I've been trading by myself. I'm not really happy with what's going on, just few weeks ago I lost about $7,000 in a particular trade. Can you help me out or at least advise me on what to do?
What actions we can take based on greeks values ? Are there any channels that share that ?
why is it called vega when the actual letter is pronounced "ni"?
Because that is the way we say it in Amurica and if you don't like it GTFO
@@eddenoy321 are you for real? Maybe don't use greek letters if you are that insecure
Vega isn't a greek letter.
@@JayLinkinGrylls When Amuricans speak Greek we speak it anyway we please. Go back to your home country, commie !
Please talk about xrp and if it will become fedcoin to pay us gov dept?
θ gang reporting in!
would it be safe to say that buying options in the evening is a bad idea overall if planning to day trade due to daily theta pretty much almost up? also on fridays in the last couple hours of the day and a theta of lets say .15. would i be pretty much underwater of .45 cents being that weekend theta loss aswell as fridays is working against me?
Can they be used to filter and find good options to trade? Anyone knows any tools or guide lines on how to use Options Greeks for entering a trade either long or short? Kind of what values to look for in each or all of them to enter or exit a trade?
Thanks dude
Is it weird, that i bounce between Richard and KamikazeCash for investment basics?
Video suggestion: how to trade the difference between implied volatility & historical volatility.
Indeed !
Great Video!
Covered calls are my favorite! On long positioned stocks. I don't care if I'm locked in a losing position that I believe in.
If you sell a cc and the stock rises, you may lose on a portion of the gain. But, time is on a person's side more often than not when writing CCs with short expiration dates.
Thanks for the work done on the video, I want to be an investment analyst, could you recommend me some books to be more efficient when analyzing companies?
I'm still 17 years old but you know what they say the faster you start the better
The explanation is understandable, but it's not clear how an investor will use this info to make a decision or gain intuition.
What’s vega? I know the whole Greek alphabet and that’s not a letter I’ve heard of. That symbol is nu
In the video he says "not actually a Greek letter" I guess because it describes volatility the name vega stuck around because it's more familiar to English speakers than saying "ni"
6:48
Fun fact, vega is not a Greek letter ;-)
Options are betting not investing.
The only reason to buy Is to hedge the portfolio
I disagree, they can be a cheap way to get leverage on a position through LEAPs
@@dylan7476 how you can be sure to exactly the stock price in an exact days.
Is too much Easy to fail, because market is not predicatble.
@@castroganlecar4854 then you can simply roll the option, or start off by buying a longer term option.
9:21 Oracles.. flying close to the sun... You are doubling down on Greek references, aren't you?
You should know: every time you say 'We don't have time for' relating to a deep dive, we do have time! I, and I suspect many others, would stick around for long form educational content.
Make something 30 minutes long or more. See what happens ;)
So you know that he does?
Basically it’s a different symbols explaining how you gonna lose money
Back test option strategies. All the "strategies" underperform buy and hold over time.
How? Historical options prices aren't easy to find like stock prices.
I have a question. What if share fall to 0!! And how can we say with guarantee that strong fundamentals wouldn't fail or wouldn't go to zero. Why? Is there any reason why? Could you please answer my question
The only way a stock goes to true zero is if the IPO was a scam or if a bankruptcy court cancels shares in order to pay bond holders with the liquidation money. Why? Because being at zero means that no one would even pay a dollar for all the shares in existence.
As for ordinary companies, if a stock price falls too low, a computer will see the opportunity and automatically buy it up before you can even open the ap and see the problem. The guy using the computer isn't worried because he knows even if a company is liquidated tomorrow he should get a fair payoff if he bought at a good price.
When the option moves less in price then the stock with a delta between 0 and 1, why would someone choose to invest in the call option rather then the stock?
Are the price of the options much lower, so that the profit comes from buying 100 options at the same price as 1 stock, so the smaller movement ind the price of 1 options multiplied by the number of options makes is profitable?
I have never bought or sold options and I don't plan to. I'm just curious how they work.
It's may seem a bit misleading but since an option controls 100 shares of a stock we have to multiply that return on the option price by 100 to get the real return. Using the example in the video where the option increased in price by .20c when the stock moved $1, that would actually make your entire option worth $20 more! This is known as option leverage and it's why when investors are relatively confident about which way a stock will move, it can make options more desirable. This leverage goes both ways however so it common to see options traders lose their entire position if the stock makes an undesirable move. It's a bit complicated but I hope that makes sense! :)
Edit: missed a zero
@@noahwillard4881 that's $20 not $2
@@88Nieznany88 oops! Missed a zero
Yep it's because purchasing options creates a lower drag on cash compared to buying the actual shares at the current market prices.
The idea is that you would have the required money available by then.
Four Economic sectors. Primary, Secondary, Tertiary, Quaternary.
Is there a chart or website or channel, that breaks down WHAT time of year each sector is at its strongest?
As well as a chart that shows historical data Year by year for each sector performance?
Dude I'm Greek, what's "vager"
theata gang gang
The more i learn about investments and options, the more I understand that nobody really knows everything and it's a little disconcerting.
Theta Gang.
Timeo danaos et dona ferentes
All parameters seem local metrics in very non linear space ... Have to tread very very carefully... Seems like there is no other option
crap! you just explained an audio compressor...lol
thank you so much! I can never remember these lol
why tf is it called vega ?????????????????????
Happy Friday everyone! The first 1,000 people to use this link will get a 1 month free trial of Skillshare: skl.sh/theplainbagel01221
That is “nu” not “Vega” (which is a star)
🙄🤨😮💨...
Umm, Sir???
Please Pronounce the letters correctly!!!
ν= ne
I don't understand a word.
second
first
lol just kidding, love the vids bro
Very lazy vid. Just show the option chart Vs. the stock chart. How is that hard? It show exactly what is happening.