WDIS: Top Dogs

Portfolio Delta & Theta

WDIS: Top Dogs

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

Last week, Howard and Tom put on 15 new trades to begin building out Howard's portfolio. Today, Tom explains what Howard should keep an eye on when looking at his account.

Beta weighting allows traders to put context around their whole position against the S&P 500, the largest 'benchmark" used in the trading world. In this instance, Howard's beta weighted delta is long, meaning his portfolio has a bullish directional bias overall.

Theta decay is daily option decay, which occurs as a result of selling options that are out of the money. Tom and Howard discuss what is reasonable for Howard's account size and current exposure.

Looking at Howard's positions, he has questions about timing his trade exits and assessing his individual stocks.

With his long portfolio bias, Tom asks him about neutralizing his position a little by selling some stock in an ETF like QQQ.

Tune in as Howard learns how to hedge his position and how it will impact his portfolio, buying power, and more!

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