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Options Crash CourseOptions Crash Course: Ep #4 - Profit, Direction, and Probability | Sep 11, 2020
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    Options Crash CourseOptions Crash Course: Ep #4 - Profit, Direction, and ProbabilitySep 11, 2020

    To round out the first week of our Options Crash Course, we take a look at option delta - a derivative of the BSM, and the one variable that can measure profit, direction, and probability, simultaneously. Once we understand that the textbook definition of delta shows us how an option’s price will move when the stock price moves, we then turn to understanding how delta measures our directional risk and position probability.

    Specifically, delta can show us both the directional exposure of our option position, relative to a pure stock position, and it measures the probability of that specific option expiring ITM at expiration.

    LINKS TO ALL CRASH COURSE EPISODES:

    Ep #1: The Source of all Strategies

    Ep #2: Deconstructing Option Prices

    Ep #3: Extrinsic Value Extras

    Ep #4: Profit, Direction, and Probability

    Ep #5: The Natural Decay of Options

    Ep #6: Trading Changes in Implied Volatility

    Ep #7: Gamma: Sign, Magnitude, and Risk

    Ep #8: Contracts, Decay, and IV Overstatement

    Ep #9: Defined-Risk Strategies: Part One

    Ep #10: Defined-Risk Strategies: Part Two

    Ep #11: Undefined-Risk Strategies: Part One

    Ep #12: Undefined-Risk Strategies: Part Two

    Ep #13: Managing Winners, Losers, and Rolling

    Ep #14: Directional Bias at the Portfolio Level

    Ep #15: Positive Theta at the Portfolio Level

    Ep #16: Putting it all Together: Trade Entry and Exit

    Ep #17: Putting it all Together: Trade Management

    Watch the second season on Strategy Management!

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