Options Talk

Episode 07 - Put Spreads

In "Episode 7 - The Strategy of Put Spreads" of "Saxo Options Talk," join Koen Hoorelbeke and Peter Siks as they dissect put spreads in the options market. This episode provides an in-depth look at both long and short put spreads and when to employ each strategy effectively.

Understanding Put Spreads:

• Long Put Spreads: Delve into buying premium with long put spreads, suitable for a bearish market outlook or as a protective measure for your portfolio.
• Comparing Strategies: Evaluate why traders might prefer a put spread over a naked put, detailing the advantages and the importance of defined risk and potential.

Tactical Execution:

• Strike Placement: Explore the rationale behind setting strike prices based on your market perspective and the desired balance between probability of success and cost efficiency.
• Risk Management: Learn how to set profit targets and stop-loss orders for long put spreads, and why the defined maximum loss can be more advantageous than traditional stop-loss orders.

Selling with Short Put Spreads:

• Short Put Spreads: Transition into the realm of short put spreads, also known as credit or bull spreads, and uncover why this defined strategy can be seen as a bullish play.
• The Benefits of Time Decay: Understand how selling premium can turn time decay into a positive factor, enhancing the profitability of short put spreads.

Advanced Considerations:

• Volatility Insights: Discuss the impact of implied volatility, particularly when it exceeds historical volatility, and the strategic implications for put spread positions.
• Event-Driven Strategies: Consider how events that influence volatility can affect put spread strategies and the opportunity to buy puts as a hedge when volatility is low.

Preparing for the Next Step: The episode concludes with a teaser for the upcoming discussion on 'rolling' strategies, providing listeners with a reason to stay tuned for more advanced options trading techniques.

"Episode 7 - The Strategy of Put Spreads" is packed with strategic advice and practical tips for both novice and experienced traders looking to expand their knowledge and refine their approach to put spreads in options trading.

Episode 06 - Delta's

"Episode 6 - Understanding Delta in Options Trading" of "Saxo Options Talk" is a deep exploration into the world of 'delta,' a key concept in options trading. Join hosts Koen Hoorelbeke and Peter Siks as they demystify delta's three core definitions and practical applications.

Discover Delta's Functions:

• Delta's Definitions: Learn how delta indicates the probability of an option expiring in the money, the expected price change of an option for a $1 move in the underlying, and its role as a hedge ratio for establishing delta-neutral positions.
• Delta Values: Understand the significance of delta values in determining the moneyness of options, with ATM options having a delta around 50, ITM options above 50, and OTM options below 50.

Impact and Dynamics:

• Volatility and Maturity: Dive into the impact of volatility on delta and how delta's relationship with time to maturity affects option pricing and strategy.
• Gamma and Delta Velocity: Briefly explore gamma and the concept of 'fast' and 'slow' deltas, providing insight into their behavior over different time horizons.

Strategic Application:

• Bullish or Bearish Stance: Learn how the aggregate delta of your positions can reveal the overall bullish or bearish nature of your portfolio.
• Beta-Weighted Delta: Grasp the concept of beta-weighted delta to calculate the delta of a complete portfolio and its importance in portfolio management.

Practical Use-Cases:

• Synthetic Shares: Examine how synthetic shares are constructed using options and their practical use in trading strategies.
• Delta Neutral Positions: Understand how traders can profit from delta neutral positions and the interplay of delta with theta, the time decay factor, within these strategies.

Future Episodes Teaser: Look forward to our upcoming episodes where we will dissect long and short put spreads, continuing to build upon the foundational knowledge shared in today's discussion on delta.

"Episode 6 - Understanding Delta in Options Trading" promises to enrich your trading strategy with a thorough comprehension of delta and its numerous applications in the options market. Tune in to expand your trading acumen with Koen and Peter's expert insights!

Episode 05 - Short Call Spreads

In "Episode 5 - Short Call Spreads" of "Saxo Options Talk," hosts Koen Hoorelbeke and Peter Siks offer a comprehensive guide to mastering short call spreads, a strategy ideal for a bearish to neutral market outlook. This episode begins with a brief recap of long call spreads before delving into their counterpart, short call spreads.

Exploring Short Call Spreads:

• Why Choose Short Call Spreads? Understand the strategic use of short call spreads in down or sideways markets.
• Maximizing Profit and Managing Risk: Learn how to calculate maximum profit, select the right strikes, and balance the width of the spread to align with your market outlook and risk tolerance.

Strategy and Selection:

• Picking the Short Strike: Dive into the decision-making process behind strike selection, from aggressive to safer choices, and the trade-off between premium weight and probability weight based on delta.
• Premium Selling vs. Buying: Unpack the rationale behind selling premium, embracing time decay (theta) as your ally, and targeting the ideal time frame.

Advanced Insights:

• Volatility's Role: Discuss the impact of implied volatility on option pricing.
• Profit and Loss Management: Personal strategies for taking profits or losses, including early closing and managing multiple contracts. Explore the concepts of legging in or legging out.

Practical Considerations:

• Margin and Assignment Risk: Understand why short call spreads require margin and the risk of assignment, particularly when positions move deep into the money and/or dividends are paid out on the underlying stock.

Looking Ahead: Stay tuned for our next episode, where we will delve into the nuances of delta, further enhancing your options trading strategies.

"Episode 5 - Short Call Spreads" is an essential listen for traders aiming to navigate bearish or neutral markets with a strategic edge. Koen and Peter's insights provide the clarity and depth you need to effectively implement and manage short call spread strategies in your trading portfolio.

Episode 04 - Long Call Spreads

In "Episode 4 - Long Call Spreads" of "Saxo Options Talk," hosts Koen Hoorelbeke and Peter Siks provide an in-depth analysis of long call spread strategies in options trading. This episode is tailored to enhance your understanding of this more complex but highly strategic approach.

Understanding Long Call Spreads:

• What is a Long Call Spread? We break down this strategy, which involves a combination of buying and selling call options.
• Why Choose Complexity? Explore the reasons behind opting for a long call spread, including its lower cost and suitability for a bullish outlook with limited upward potential within a specific time range.

Maximizing Profits and Managing Risks:

• Calculating Maximum Profit: Learn how to determine your potential earnings and understand the concepts of defined risk and defined profit.
• Handling Unexpected Outcomes: Strategies for dealing with scenarios when the market exceeds your expectations and the implications of such movements.

Practical Considerations:

• Profit-Taking and Assignments: Guidance on when to take profits and what to consider regarding option assignments.
• Break-Even Point and Expiration Strategies: Identifying your break-even point and deciding whether to wait until expiration or take action sooner.
• Risks of Unbalancing the Spread: Understand the consequences of selling one leg of the spread, potentially leading to a naked call and elevated margin requirements.

Advanced Insights:

• Option Moneyness (OTM, ATM, ITM): A look at how option moneyness affects long call spreads.
• Volatility and Theta Decay: Discussing the role of low volatility in buying more premium and comparing the theta decay on different positions.

Next Episode Teaser: Stay tuned for our next episode, where we'll dive into "Short Call Spreads," offering a contrast to the strategies discussed in this session.

"Episode 4 - Long Call Spreads" is packed with essential knowledge for traders looking to advance their skills in options trading strategies. Tune in for a comprehensive understanding of long call spreads and how to effectively incorporate them into your trading.

Send In Your Options Questions

We're excited to offer you the chance to be more involved in our podcast. Feel free to send in your options-related questions to optionquestions@saxobank.com. We'll select some of these questions to answer in our upcoming episodes, providing you with tailored insights and advice. It's a fantastic way to address specific concerns and enhance everyone's learning experience.

Episode 3 - Long Calls

"Episode 3 - Long Calls" of "Saxo Options Talk," hosted by Koen Hoorelbeke and Peter Siks, focuses on the strategy and intricacies of buying call options. This episode aims to clarify the often-misunderstood aspects of long calls in options trading.

The discussion begins with an exploration of why traders might choose long calls and the key differences between this approach and traditional stock investing. The concept of time decay and its effect on options, emphasizing the importance of defined risk, is also covered.

Koen and Peter provide insights into the necessity of anticipating a directional move in the market when selecting long calls. The episode offers guidance on choosing the right strike and expiry dates, with an emphasis on understanding delta and its critical role in these decisions.

Listeners will learn about strategies for setting take profits, handling closing orders after they are filled, and deciding between using a stop loss or a max loss approach. The episode also discusses the strategy of staggering profits and compares the outcomes of exercising options versus trading them.

Further, the episode explains volatility levels and the intricacies of the bid/ask spread, including how to monitor these factors over time for better trading decisions. The distinction between active and passive buyers is discussed, along with how the bid/ask spread reflects market liquidity.

Additionally, the episode briefly touches on the similarities with put options, providing a segue into the upcoming episode about vertical spreads.

"Episode 3 - Long Calls" is packed with practical insights and strategies, offering listeners valuable guidance on mastering long call strategies in options trading.

Episode 02 - Option basics

Join us for "Episode 2 - Option Basics" on "Options Talk by Koen and Peter," where hosts Koen Hoorelbeke and Peter Siks cover the fundamental concepts of options trading. This episode is your essential guide to understanding the basics, tailored for both beginners and seasoned traders seeking a refresher.

In this episode, Koen and Peter simplify complex topics, starting with an explanation of calls and puts. They discuss the strategies and implications of going long compared to going short, and the dynamics of buying and selling premium. The differences between American and European style options are also clearly outlined, highlighting their relevance in trading decisions.

Listeners will gain insight into contract sizes and the meaning of terms like In-The-Money, At-The-Money, and Out-The-Money. Additionally, the factors that influence an option's price are explored, providing a well-rounded introduction to options trading.

"Episode 2 - Option Basics" promises to be an informative and accessible session, perfect for those starting their journey in options trading or looking to strengthen their foundational knowledge. Don't forget to subscribe for more insightful discussions and expert analyses in the world of options!

Episode 01 - Introduction

Welcome to the inaugural episode of "Options Talk by Koen and Peter"! In this episode, your hosts, Koen Hoorelbeke and Peter Siks, introduce themselves and dive into the exciting world of options trading.

Get to know Koen and Peter, seasoned experts in the field, as they share their journeys and what led them to start this podcast. They'll discuss their vision and what listeners can expect in future episodes – from demystifying the complexities of options trading to offering insightful market analysis.

Whether you're new to options or a seasoned trader, this podcast promises to be a valuable resource. Koen and Peter aim to make options trading accessible to everyone, simplifying complex strategies and bringing clarity to this fascinating area of finance.

Join us as we embark on this journey, exploring the depths of options trading, sharing key insights, and most importantly, having engaging discussions. "Options Talk by Koen and Peter" is more than just a podcast; it's your weekly deep dive into the world of options, delivered by experts who are as passionate about trading as they are about teaching it.

Don't forget to subscribe for weekly insights and become a part of our growing community of options enthusiasts!