- Organized Activity Log (D)
- Created | Change in Greeks over trade duration calculator
- Refined: Data Journal (Compute Change in Greeks over duration of trade)
- Reviewed: 8.2.2021
- Studied: Larry McMillian, Option Pricing Models, Time & Sales, Black-Schoels Model, Trinomial Option Pricing, Exotic Option, American Option Pricing
- Read: Options as a Strategic Investment Chapter on Option Buying
Organized activity log, built out trade date journal to compute change in greeks over duration of trade. Reviewed trade form 8.2.2021, did in depth study of tape & level 2, watching video playback. I computed how many transactions happening per second seems to be no way to effectively watch tape. Created notes & insights document in google drive & noted insight there. Added section in data journal modules to input underlying price at entry & exit now that I have recorded data of the tape from my trades. Studied more in depth Option Pricing models & black Schoales models, Trinomial Option Model, trying to understand exactly how options are priced moment by moment, just to understand the theory. Ordered & Received ‘Options as a Strategic Investment’ book recommended in TAST. Massive text. Read about the author briefly then read the section on ‘Option Buying’. Gained clarity that this is a valid strategy used by people. For some reason I still have it in my head that this is all a scam somehow, even though I see it work every day in real time. The book helped continue to ease this anxiety. Seeing it in print, explicitly stated, was relieving somehow. Noted more mistakes made on trade on 8.2.2021 which took significant digging, but unearthed some meaningful insights about exiting & how to dial in trade. Likely overthinking this, but this type of deep study eventually leads to me relaxing & then I come away with a sort of mastery & comfort in execution.
Links Studied:
TOS Learning Center | Times and Sales
Investopedia | Black-Scholes Model
Investopedia | Option Pricing Theory
Investopedia | Trinomial Option Pricing Model
Investopedia | Exotic Option
Traders Paradise | American option pricing and early exercise
Incredible Resource:
Option Strategist | Lawrence G. McMillan | Weekly Stock Market Commentary 7/30/2021