The Option Trader’s Hedge Fund: A Business Framework for Trading Equity and Index Options
by Dennis A. Chen, Mark Sebastian
9. Most Used Strategies
In this chapter you’ll find the five most used strategies for TOMIC. This gives you an overview and an example of each strategy.
How should you set up each of the major short premium spreads? What is the exact criterion for evaluating a decent sale of insurance? Clearly, not all sales are equal and the key to any kind of success is to sell insurance premium when it is at a “good price.” In this section you’ll find five of the major spreads, from construction to management to exit. Although every trader has a different approach to trading, you have spent time studying each spread, trying to find what you believe is the best approach to trading them. The issue is that every trader has different risk tolerances and trading ...
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