SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Zeev's Turnips - No Politics
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: TREND1 who wrote (63925)5/8/2002 2:20:49 PM
From: Carl R.  Read Replies (1) of 99280
 
Exactly correct. The key is to stay Delta neutral, but you can get bitten if the stock gaps (only if it gaps the wrong way). But as expiration approaches, the delta drops on out of the money options, so you have to slowly close your hedge to stay delta neutral, which tends to push the stock towards the Max Pain point. Note however that it is just a gentile nudge, and in most cases the other market variables are more significant.

Carl
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News