The podcast discusses various rolling strategies used by professional traders to manage their positions, especially when the market is not in their favor. The hosts, Shane and Richard, delve into strategies such as rolling up and down, rolling out, calendar spreads, and vertical spreads. They also emphasize the importance of managing risk and understanding the volatility surface in options trading.
- Rolling up and down: This strategy involves adjusting the strike price of an option to a higher or lower strike price, respectively. This is typically done to manage risk or to respond to changes in the underlying asset’s price.
- Rolling out: This strategy involves extending the expiration date of an option. This is typically done to give the option more time to become profitable.
- Calendar spreads: This strategy involves buying and selling two options of the same type (calls or puts), same underlying asset, and same strike price, but with different expiration dates.
- Vertical spreads: This strategy involves buying and selling two options of the same type, same underlying asset, and same expiration date, but with different strike prices.
- Risk management and volatility: The podcast also discusses the importance of managing risk and understanding the volatility surface in options trading.
- Bullish: The hosts express a generally positive sentiment towards the use of rolling strategies in options trading. They highlight these strategies as essential tools for managing risk and potentially increasing profitability, especially when the market is moving against the trader.
- Bearish: There is no explicit bearish sentiment expressed in the podcast.
- Neutral: The hosts emphasize the importance of understanding and properly implementing these strategies. They caution that while these strategies can be beneficial, they also require careful management and a good understanding of market dynamics.