Jay Pestrichelli co-hosts this episode with Derek where they discuss the continued talk around Robinhood Traders buying deep out of the money options to force market makers to buy stock. Plus, they discuss the reported $4 Billion spent buy Softbank to purchase option positions in some tech names. How do market makers hedge and the challenges with short term deep out of the money call option buying? Plus, why they both hate and love the idea of covered calls.
In this episode:
Robinhood Option Traders buying cheap deep out of the money call options.
Does call buying really force market makers to buy up a lot of shares?
Examining option delta and time decay on short term Tesla call options.
How the market sometimes makes you pay a tuition as you acquire trading knowledge.
One of the best trading books Market Wizards by Jack Schwager.
Examining the reported Softbank option spread positions.
Why covered calls sometimes are detrimental to a portfolio.
How often the overall market is up more than 15% in a year historically.
What does option delta mean?
How does an options delta factor into how a market maker hedges?
Mentioned in this Episode:
Derek Moore’s book Broken Pie Chart
Jay Pestrichelli’s book Buy & Hedge
Derek Moore and Jay Pestrichelli White Paper on Concentrated Stock Hedging download here
Market Wizards by Jack Schwager
Stock Market Wizards by Jack Schwager
(New Book) Unknown Market Wizards by Jack Schwager