The Importance of Delta and Gamma – Explained

It’s Friday, and you know what that means – it’s time for our weekly Q&A session.

This week, we got down to business, walking through sports betting stocks…

Sharing five Chinese stocks to short…

Going live to talk through this monster earnings week…

And diving into the Robinhood IPO.

Plus, every day I gave you specific, actionable trade ideas – that’s red-meat information that you can’t get anywhere else!

And today, we’re talking shop with a new round of Ask Me Anything questions straight from Profit Takeover readers:

First up, we’re talking all-things implied vol…

Hey, Zach! (Can I call you Zach?)

This is great – I talk about implied volatility a lot here in Profit Takeover. In fact, it’s the exact reason we’re able to create low-risk option trades with the potential to make asymmetric returns.

Essentially, implied volatility is how far the market thinks a stock can move. But really, it’s so much more than that. In my book, implied volatility is the key to building the perfect option trade. And I have a Profit Takeover-exclusive report that dives into all the details.

Check out my free report, Build the Perfect Option Trade with Implied Volatility, to learn more about IV’s power.

Next, we’re getting back to the basics with a question from a beginner trader…

Anyone can meet the qualifications to trade options – you just have to take a few simple steps before you can get started.

First off, you need to open an options trading account with a broker. I’d suggest starting with a platform like ThinkorSwim or Tradestation, where you can practice trading options in a paper trading account that doesn’t risk any real money.

Once you have an account, you need to get your options clearance. Basically, your broker will just ask you a bunch of questions regarding your experience in the market, and then assign you a level of clearance from there.

Here at Profit Takeover, I only recommend simple call and put trades, which are typically on the lower end of clearance levels and therefore available for almost anyone to trade – even beginners like you, Bertrand.

And to wrap it, we have a question about a topic I just dove into this week – options greeks.

Okay, so, an option’s price is supposed to move with the underlying stock’s price, right?

But that doesn’t always happen. There are more factors that go into an option’s price, and options greeks like delta and gamma help you measure that.

During this week’s live trading session, I spent a good 20 minutes talking about option greeks like delta and gamma. You can catch a replay of that right here for an in-depth explanation.

But I also gave a cliff-notes version during Thursday’s Money Morning Live. And you can check that out below…

Have a great weekend, folks. I can’t wait to dive back into the money-making world next week.

Until Monday,

Mark Sebastian

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