MTM Options Trader Newsletter - Option Vega - How It’s Different From Other Option Greeks

[image]( [image] This Week in the Market With the S&P 500 closing lower over the past five sessions, there may be some concern that the eventual market pullback has started already. But as we have seen over the past several months, that has not been the case as buyers have stepped in time and time again and moved the indexes to all-time highs. Possible early market action this week may set the tone and see if the pullback is for real this time. The three major indexes all closed a fair amount lower this past week with the Dow taking the biggest hit and closing below its 50-day moving average. Implied volatility levels moved higher closing at levels not seen in several weeks. Is the market getting nervous and anxious? Market participants will have a full week of trading to look forward to this week after last week’s Labor Day break. Several economic reports are due out this week and listed below, including CPI and the latest retail sales figure. At the time of this writing, there are no expected talks by any of the Fed members. Quarterly earnings remain practically nonexistent. Try not to guess what the market is going to do next and have a happy, healthy and prosperous week of trading! Sep 13: Federal Budget Sep 14: Consumer Price Index Sep 15: Import Price Index Sep 15: Industrial Production Sep 16: Jobless Claims Sep 16: Business Inventories [Read Our Blog]( Option Vega - How It's Different From Other Option Greeks Option vega, like option gamma, is one of those option greeks that often confuse option traders. But it does not have to be that way. Below we will break down the dynamics of vega so that even the most basic of option traders will have a clearer picture of this mystery greek. What Is Option Vega and How Does It Work Option vega measures the impact implied volatility (IV) has on option premiums. Keeping it simple, for every 1% change in IV, vega will change the premium by that amount. If IV rises 1%, option premium will rise by the amount of vega, and if IV falls 1%, option premium will [Continue Reading ...]( MTM Watchlist Here are some trade ideas we may explore this week in group coaching class: SPY – With five consecutive closes lower, stocks may continue to fall. Additional call credit spreads like we looked at on Friday may be looked at on the S&P 500 ETF. AAPL – The stock pulled back huge on Friday closing around some potential support from a trendline. In addition, the 50-day moving average is just below where the stock closed. If the market does not sell off in a big way, bull put spreads around the moving average will be modeled out. NVDA – The stock has been trading sideways for several sessions. Iron condors around potential support and resistance levels may be the way to go. [image] The Short Squeeze Made Simple: Trading for Huge Profit Opportunity "The short squeeze": Everyone's talking about it, but how can you use it to take your trading to the next level? Join MTM's Dan Passarelli Thursday, Sept. 16, at 8 pm Eastern and you will learn how to: - Spot the biggest market moves before they happen - Avoid common traps of novice traders - Get in on the biggest plays in the market - in real time - Understand what fuels these massive plays [Learn More]( The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by calling (888) OPTIONS; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2021. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States