Managing Trade Delta Using SPY Explained

[@AlbyTheMovieCreator]

I don't understand why it's so important to manage portfolio delta. If I have 10 different positions opened, each of them in a different stock (TSLA; NVDA; F etc..), why do I have to care about the weighted delta? These stocks behave differently and they're not correlated, so what's the purpose of tracking delta associated with SPY? Let's suppose that I have weighted delta of +50. If SPY rise of $1, does it affect my overall portfolio, even if I don't have any SPY position open?

[@vijay00001]

Normally when to adjust positions based on delta of options? Also,What could be best tolerance level most of the traders use for one lot for both put and call options consider strangle or straddle ?

[@tastyliveshow]

We typically don't touch positions until the short option goes ITM, if it's a strangle for example. You can adjust delta before then, but realize that when you move a strike up or down, you reduce the profit zone. Totally up to you at the end of the day, but we usually wait until the strike is breached since we take on intrinsic value at that point. All extrinsic value will be zero at expiration regardless of delta and extrinsic value changes we see now, so we tend to hold off until the strike goes ITM.

[@vijay00001]

@@tastyliveshow Thanks

[@slashhashdash]

this video (#32 in the playlist) is using beta which is explained in #34. Was that intentional or should I go watch the beta vid first?

[@tastyliveshow]

Unintentional - feel free to watch the beta video and then this one!

[@Aman1012]

Do you have a segment on call/put spreads?

[@tastyliveshow]

here are a few segments that should be helpful: www.tastytrade.com/tt/search?utf8=%E2%9C%93&search=vertical+spread+whiteboard&commit=Search

[@slashhashdash]

can we have a link to the show you were referring to at the end of the video?

[@tastyliveshow]

www.tastytrade.com/tt/shows/wdis-bat-vs-bat/episodes/managing-multiple-positions-in-one-underlying-06-16-2016