Dr. Schultz (an academic and trader) explains theoretical trading concepts and practical application to take your trading to the next level.
Adjustments fall into two camps - rolling the untested side or rolling out in time. Sometimes at tastytrade, one makes more sense than the other.
With X having earnings in seven days, we have a unique opportunity to isolate the impact that IV expansion will have on our position.
tastytrade shows you how to hedge a directional earnings bet with a weekly Butterfly Spread.
When IV expands, it impacts our potential new trades and our current positions very differently at tastytrade.
Wider Iron Condors might have more risk on a per contract basis, but over time they tend to have lower volatility than more narrow Iron Condors.
Join Dr. Jim as he digs into why higher IVR gives you wider break-even points and less risk in your positions.
Normally when we use Straddles at tastytrade, they are neutral strategies without a directional bias, but this does not have to be the case.
With ATM Verticals that are usually 50-50 shots, the price doesn’t tend to line up with 50% of the width of the spread - here’s why.
Diagonal Spreads rarely set up for high-priced stocks, as the cost of the strategy is often far too great relative to its profit potential.
Volatility isn’t just for finding opportunities on order entry. If you’re not careful, it can drag down your returns over time.
Since one side of a Straddle is always “tested,” the adjustment protocols are a lot less black and white.
Short Puts are easily one of our favorite strategies at tastytrade - here’s how to defend one that goes against you.
OTM premium on order entry gives us so many more ways to win at tastytrade than ITM premium on order entry.
While certainly no match for their undefined-risk counterparts (Short Strangles), Iron Condors have performed reasonably well over the years at tastytrade.
The power of short premium is so strong at tastytrade, that even slightly in-the-money positions on order entry have POPs greater than 50%.
A tested Iron Condor will always have a debit side and a credit side with any forward roll. Here’s how to best position yourself to roll for a net credit.
Many years ago, academic finance discovered a phenomenon known as “post earnings announcement drift” - a strategy we use today for NKE.
When earnings are right in the middle of your expiration cycle, you have to adjust your timeline for strategy management. Here’s how we do it at tastytrade.
Different tastytrade strategies will possess different levels of theta, and the theta these strategies possess will move and react quite differently from one strategy to the next.
With 21 DTE right around the corner at tastytrade, we have a few positions that are in wait-and-see mode, while some others will require more active oversight.
The Ratio Spread might be the most flexible strategy that we use at tastytrade, but that flexibility invites a lot more “gray area” with how we make adjustments.
Higher-Priced stocks tend to hold extrinsic value longer, and we see a perfect example of that today with our AMZN position.
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