Eric!! This is Glen the 'options' guy you refer to in this video. You are 100% correct about options world having its on jargon and language to the point it's practically a lifestyle. Double diagonal is actually a pretty simple trade. Fundamentally, it's a straddle... so you are buying a put and a call around the same strike price and near the money. Basically, the trade works if the underlying stock travels a decent span in either direction. That's how the basic straddle works anyways and that's not too difficult to understand. Worth mentioning for anyone looking to execute this type of trade that tradingview has a good screener for finding stocks with recent history of strong direction (ADX) and range (ATR). Now, as far the other part of the trade its not that complicated either. Let's say the straddle expires in March, so that I'm expecting in several weeks to be profitable on this trade. What I can do to offset some of the cost of the trade is to sell a put/call OTM (out of the money) in the near term, like end of February. And I get money for that put and the call. If for some reason the price surges or crashes before that put or call i've sold expires im covered by the put or call from my straddle and I probably make money on it as well. I know that's a little bit tough to grok just from reading this but if you sit down and work it out you will see what I am saying it's not rocket science! anyways just wanted to comment here... thanks for the great video! crazy about how high the options volume is. oh well who can afford to actually afford to buy Tesla shares... another reason I'm short hehehe.
Hi G , You inspire me with your enthusiam please keep that discipline and you will see the results of that.
Eric!! This is Glen the 'options' guy you refer to in this video. You are 100% correct about options world having its on jargon and language to the point it's practically a lifestyle. Double diagonal is actually a pretty simple trade. Fundamentally, it's a straddle... so you are buying a put and a call around the same strike price and near the money. Basically, the trade works if the underlying stock travels a decent span in either direction. That's how the basic straddle works anyways and that's not too difficult to understand. Worth mentioning for anyone looking to execute this type of trade that tradingview has a good screener for finding stocks with recent history of strong direction (ADX) and range (ATR). Now, as far the other part of the trade its not that complicated either. Let's say the straddle expires in March, so that I'm expecting in several weeks to be profitable on this trade. What I can do to offset some of the cost of the trade is to sell a put/call OTM (out of the money) in the near term, like end of February. And I get money for that put and the call. If for some reason the price surges or crashes before that put or call i've sold expires im covered by the put or call from my straddle and I probably make money on it as well. I know that's a little bit tough to grok just from reading this but if you sit down and work it out you will see what I am saying it's not rocket science! anyways just wanted to comment here... thanks for the great video! crazy about how high the options volume is. oh well who can afford to actually afford to buy Tesla shares... another reason I'm short hehehe.