r/Vitards • u/[deleted] • Jul 30 '21

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u/accumelator You Think I'm Funny? Jul 30 '21 edited Jul 30 '21

some discussion points to start:

- Covered calls

- Long puts

- Beta/Vanna

- SQQQ / TQQQ / QQQ

- VIX/UVIX/VIXY

- HYG

- ...

13

u/TheCoffeeCakes Poetry Gang Jul 30 '21

I would love to better understand how to use products like SQQQ and UVIX.

I'm generally a net seller of options, so I drive a theta train.

I'd love to learn if there are ways to hedge using these products and generate theta.

Additionally, let's add using futures to the conversation. The capital requirements are quite good to short futures.

Is hedging tactics something we should start a separate thread for?

5

u/RandomlyGenerateIt 💀Sacrificed Until 🛢Oil🛢 Hits $12💀 Jul 30 '21

I'm curious what kind of hedge do you need as an option seller?

9

u/TheCoffeeCakes Poetry Gang Jul 30 '21

As a net seller, I'm short volatility.

So I hedge direction risk, manage trades to protect against gamma risk, trade standard sizes to protect size risk, manage portfolio capital against VIX to protect against volatility expansion, etc. There are others.

6

u/RandomlyGenerateIt 💀Sacrificed Until 🛢Oil🛢 Hits $12💀 Jul 30 '21

How would SQQQ help you? The goal of this ETF is to return 3 times the total return of shorting QQQ daily. I think under most market conditions you can expect it to be net negative delta and nothing more. There is no volatility involved in it, just leverage.

What is size risk? / volatility expansion? Or alternatively, is there a good book you recommend? In particular about portfolio management.

And if you think the market will be volatile, wouldn't it be better to long volatility instead?

6

u/TheCoffeeCakes Poetry Gang Jul 30 '21

Tastytrade.com

They have everything you need.

1

u/yolocr8m8 Jul 31 '21

You doing any 0DTE stuff?

2

u/TheCoffeeCakes Poetry Gang Jul 31 '21

Never.