Options Jive

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Portfolio Delta Adjustments

Options Jive

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

We measure our portfolio’s directional risk through beta-weighted deltas. How can we adjust them to become more delta neutral? Tune in to hear Tom and Tony help you adjust deltas in your portfolio!

Beta-weighted delta is calculated on the SPY. Taking an offsetting position in SPY is one of the easiest and most effective ways to lessen our portfolio's risk. If our portfolio is primarily short deltas, we would look to initiate some long delta positions in the SPY so we are more directionally neutral.

We can also take offsetting positions outside of the SPY. For instance, our team analyzed some common positions in AAPL, GLD, USO, and TLT and examined how these beta weighted deltas impact our portfolio. This method is a little more difficult, but does come with the benefit of diversification.

Tune in to see Tom and Tony breakdown this important part of trading!

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