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Using SOG |
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Evaluations we have found to be useful:
Time-Traveling
on
SOG
Modeling Implied
Volatility Scenarios Option Premium
Valuation Risk Management Money Management Trading account
follow-up or simulation day by day Allows all
combinations See which one is worth it or not. Excellent for real trading and paper trading.
Paradigm Modeling Using SOG:
Rapidly explore various
options combinations
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Stress Free Trading!!! By using Outpouring of the Soul as needed, either before, during or after a trading session, you regain control of your brain states and can think clearly. You are more relaxed and confident. This can give you the edge you need to succeed. For more details |
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EXAMPLES:
Figure 1 below illustrates the Strategic Option Grid for a single option purchase strategy, 14 calendar days before expiration.
NOTE THE SLOPE OF THE RED LOSS LINE.
Figure 1: SOG for a Single Option Strategy
Figure 2 below: options combination strategy (1 call long - 1 put short),
14 calendar days before expiration.
NOTE THE DIFFERENT AND MORE SAFE RED LINE.
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Figure 2:
SOG
for
a Multiple Option Strategy
Peaking into the Future
One way to evaluate our strategy is to do a little
conjecturing. For example, what if the instrument
were to climb from 75.4 to
78.4, 3 points, over the
next 4 days?
All we need to do is look in SOG
at the cell representing
the intersection of the Day 14 column and the Point
Change in Underlying Instrument = +3 row. The value in
that cell is black
(positive). That value represents our net
gain if we liquidate in four days with
the underlying price
having climbed to 78.4 (automatically adjusted for
broker's
commissions).
What-if Scenario Manipulation
"The professional option trader will… then
examine a computer evaluation of what the
different strike price and months of options
will do under various market conditions".
David L. Caplan, The New Options Advantage.Another name for examining your strategy under various
market conditions is What-if Manipulation. What-if studies
can be of value both before entering a trade and while in
the trade, in light of changing current market conditions.
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Trade
with SOG
only one time, and you will |
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