I am going to get plenty of email about this. I know what is taught and what we are supposed to know concerning the "Greeks", but the inventors of these things had their own fund blow up in 1998 following their mathematical formulas.
I get many questions concerning these Greeks every time the markets pick up the volatility. So let me be straight here and go out on a limb and have everyone a chance to argue with me about this subject.
The Greeks can be helpful, I do not pay much attention to them. There I said it!
Several reasons for this statement. The way I trade makes it okay to pay for high priced options because I get to then sell high priced options. If I buy low priced options then I get to sell low priced options.
One of my learning lessons in life was when I was trying to sell a car to a used car salesman and was quoting "blue book" values. He simply said then sell it to blue book. Well sell (or buy) your options to theo.....
Your takes on this are welcomed
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3 comments:
Good points; I went through a similar issue with a used car recently!
I think the greeks are very useful for professional traders that trade large amounts in real time.
I watched a nice dvd on how professionals trade and I think that is right. For us I will glance at the delta but really it just confirms what I was thinking on the bull put for example.
I understand them but I don't find the greeks that useful.
greeks are just tools and we need to learn and use all the tools in the tool box. MR. D says tat he does not use techs but I know better.
I think by the two comments to my post point out that there is room for each trader to use what tools are available for them.
I certainly do not have the market of knowledge cornered. Opposing views make us sit up and contemplate.
Thanks for the comments and the lively ideas.
If you leave here with new ideas that is what is intended. I have my bias and others have theres.
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