Option Trading: Build a Portfolio that creates ~ 1% Theta Decay per day
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- Опубліковано 15 тра 2013
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ACTUAL DISCUSSION begins at: 7:21. They rant way too much.
Agreed. First 7 minutes are a waste of everybody's time
I actually enjoy it it is nice to have someone else's opinion on the history of the market.
Timothy Joe
To me it is equally interesting, though my market and culture language all are so different!
Thank you
It's because it's a live show and they need to kill time, but I hope they only uploaded the important parts.
"Hey, nobody cares about Tesla." I love that Tom said that. 7 years later and they both drive Teslas and it's the most valuable car company in the world. This goes to show how dynamic our world is.
as soon as I heard that I came to the comments. lol
@@gzarza hahah I love it
@@gzarza lol same
but they still don't care
You missed what they said about Tesla.
The title of the video should be updated to say 0.1% of Theta per day.
TSLA @ $82, such a throwback!
Hello, from the future, it's like 800 bucks now 😂😂
Like, after split
It would be overpriced now at 82.
@@serbanalex3228 Hello from the future future it is now at 330 Pre-split ^^;
Still not bad considering the shooting of the video though.
It's at 168 now
Awesome video. We also like to make sure we are long theta. Keep that money rolling in every day.
Great convo 👍🏻 been trading options for 6 months now. Watched hundreds of videos. This channel and tastytrade have the best options content by far.
It's not 1% OR 0.01%. 2.50 is 0.1% of 2,500. Come on guys. Don't confuse everyone please.
Agreed, they failed basic math
10 basis points per day
Haha yeah I came to the comments for the same reason. So the title of the video should be how to earn 0.1% a day?
Best financial content ever!!!
YOU GUYS ARE GREAT
I have a ira account so ould not do this trade but can I do this if I own shares in a stock and is it still a strangle. is the return on capital similiar if I sell the call and put against it? I have a decent sized account.
$2,500 x .01( 1%) clearly equals $25... what am I missing here? Love TastyTrades stuff but maybe there math isn't the greatest haha.
@run2daylite73 - I think the mistake was the slide said the $25k figure was the portfolio value, when the test recommended Theta at 1% of net liquidity (which should be closer to 75k)
At the very end like last 20 seconds they say “1% should be 0.01%.” But I’m still not sure if they meant .01% or .1%.
Yeah it was a mistake. Goal is 0.1%
15:50 is where they mention the correction
It's return on capital. So the account is $2500 but only deploys 10% of capital at a time, and makes 1% per day on that.
I think you’ve *FINALLY* decided that you’re right - the market *IS* fair. Previously, I would have argued that it was an UNfair, *3-sided* market, with the _”house”_ being the *MARKET MAKERS.*
“I live in a Paperless World”...Shuffles around dozens of papers.
the tastytrade network!
Tom is hard as hell to follow.
So trade higher Iv rank stocks in iron condor basically?
This is great advice to apply to life
I have à question when the decay is applied ? At the end of the during when the market close or at each variation like other component of the formula
It just comes off over the course of the day basically
1% theta decay seems like a lot. IS that 1% of the Margin Used or 1% of Net Liq (i.e. $100k Net Liq Portfolio, $50k Margin for Options). 1% of Margin used would be $500 / per day. seems more reasonable, or 0.5% of Net Liq. This being a general target
I favorited the shit out of this video. Great stuff.
what are the best online trading classes, that can teach me how to buy and sell options, for beginners?
this
@tastylive ~ this surely has to be .2% not a full 1% per day Theta Decay target... please revisit this topic.
In the first page they talk about 1% decay but in the example they say 2.5 out of 2500 which is 0.1%. Which one is correct?
0.1%, look for a reply by @johnmeeker9752
0.1%, but they never updated the video title.
I don't get it.... 25 is 1 % of 2500, why did they change it to 2.50 ?
the option multiplier is 100 shares. 2.50 premium is 250 in cash
9:52 Why gme buy stoppage was a crime. It is only fair if you can play both sides. Apex clearly execs should be in jail.
watching this in 2020 and seeing tesla under 100 lol
when he says 1% theta decay per day is he talking about gross profits (cash in hand) after closing all trades?
Market price, so gross UNREALIZED profits/losses depending on whether you are long or short.
7:30
TSLA in 80s? what decade is this?
Well, you could, bet/buy the Blackhawks to lose, r did I not understand correctly?
The options equivalent of their sports book example would be if you could buy calls or buy puts, but NOT sell calls or puts. So yes you can buy the Blackhawks to lose, but you're still paying the bookmaker's price, not (necessarily) a fair market price.
These guys are hilarious
16:50 1% is 25
You use only 10% of Portfolio Cash to trade to protect yourself. $2500 x 10% = $250. So $250 x 1% = $2.50
But that's not a realistic approach. With margin or cash secured, u don't get that 1% return on the portfolio, unless u play extremely high IV. With futures options possible but not stock options.
Straighten papers...straighten some more...not straight enough...oops once more...there that's perfect.
BUT! dont forget delta/gamma :)
Neutral
VIDEOSUPERHIGHWAY gamma yawn
beta weight it and adjust when delta crosses 50.
@@EugeneHaroldKrab Please explain this more, thanks
I generally don't touch >20∆
Kill a tree every day? Should wood futures be up? HAHA
LOL
1% or .1%
karen!
I'm new in options but have been trying to get the lingo down. Listening to any of these tasty guys they talk a mile a minute and seem to be all over the place talking about alpha dog upside with equal quasi downside coupled with theta copulation taking upside downside theta decay on price action of weeklies of percent decay times actual cost conference times 65. What the hell is all that shit!!! Spell the shit out talk a little slower and know that you have people that aren't experts listening trying to learn something new.
Tom is hard to follow when he explains things - and sometimes I don't know if I am missing something or if he is saying something the wrong way (I could point out the most confusing videos but I won't). Tony usually catches it when that happens but not always. Anyway - you really have to go through all of the learning and also start trading these options to get a handle. It does get easier. It is also important to remember that this is an evolving process even for these giys. I have only been here a month or so, but I have already figured out some of the things they said 5 years ago (about managing, etc) have changed over time.
I realize your comment was about a year ago, but if you are still at a novice level for options trading, I'd suggest starting with videos from many of the other professionals on UA-cam. Once you have a more solid understanding, coming back here will be extremely helpful. These videos are for new traders, but I'd say they are for upper level new traders at best.
the same issue for me in that tom talks very fast. my solution is to slow down the playback speed until i am comfortable with the rate that tom is speaking and i can comprehend it better.
are u serious..u think ur system is better than this?
1% would be .0001, not .01
How can you only focus on Theta alone? You're going to get shitted on when your gamma moves against you. Anyone who's trading options that hasn't read something by Taleb is wasting their time.
You are not very open minded my friend, when there's a will, there's a way....
Taleb is not famous. Tasty Trade is Infamous. That means more than famous.
Are you telling me you can earn 1% on your trading account PER DAY this way???!!!
The title says 1% (.01) per day, they talk about making 1% (.01) per day, but the math that they use works out to .1% (.001) per day... $2500 x .001 = $2.50. Do you really want to take advice on this kind of a topic from two guys that can't do math???
its a scam :)
Bet you still an idiot 5years later.
@@hiatuz3512 yes he is he cant help it hes spanish
@@hiatuz3512 lol 100% 😂
@@cmhvacr1010 I am what would be considered a "minority" aka black (british), but I have to agree. When I lived in Barcelona Spain, I found them too emotionally unstable to consider enterprise with.
Moved to Poland and they handle the coronavirus situation pretty well being less spoilt vs the West, and easier at doing business with.