tastytrade Options Jive

tastytrade Options Jive


Latest Episodes

An Introduction to Diversification
February 07, 2020

Traditional finance reminds us that it's prudent to diversify our portfolios...that we should never put all of our eggs in one basket. It's good practice to split up our eggs across multiple baskets. To examine this idea, the research team conducted a...

Volatility Contraction on Up Days
February 05, 2020

How much does implied volatility contract when there are up days? Study SPY 2005 to present Recorded the magnitude and frequency of volatility contractions when the market moved up We find that the when the market moves up on any day, we see a vol...

Time in the Money
February 05, 2020

This segment of Options Jive looks at how many days calls and puts are in the money (ITM). As option sellers, we want our options to expire out of the money. So how long do calls and puts typically spend in the money? The study shows that on average,...

POP and PnL
January 29, 2020

Tom and Tony discuss why tastytrade prefers to trade the middle ground between average P/L and probability of profit. Reasons include: less whipsaw and P/L volatility than higher delta strangles higher ROC than lower delta strangles higher...

Iron Condors vs. IVR
January 29, 2020

Iron condors are one of tastytrade's commonly used defined risk strategies. But how do they perform when we look at specific market environments? Study Compared Iron Condors with short 30 delta options and long wings $5, $10, and $20 wide All trades...

Gamma-Theta Tradeoff
January 22, 2020

Gamma measures the sensitivity of option delta to changes in the underlying price, and theta describes the time decay of the extrinsic value of the option. These two Greeks typically have an inverse sign relationship, meaning that a contract with a...

Why Vol Expands
January 22, 2020

Contrary to popular belief, volatility is not dependent on the directional price movements of underlyings. Certain underlyings tend to have a different relationship between price moves of the underlying Volatility is dependent on magnitude of price...

Correlation vs. Cointegration
January 15, 2020

Here we discuss correlation and cointegration, the differences between them, how they're measured, and what they're each used for. We also look at examples of ETF pairs that demonstrate both correlation and cointegration! Although they are often...

History of IV Rank
January 15, 2020

IV rank was developed in 2000 and has been improved since then to become a critical tool in determining trade decisions. The fundamental reason for it working comes down to the philosophy of mean reversion in implied volatility. As IV rank increases,...