Delta.

“Fortune sides with him who dares.”

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 Table of Contents

Page Topic
3 Introduction
4 Options
5 Options
6 Greeks
7 Greeks
8 Calls
9 Puts
10 Delta Strategy Overview
11 VIX
12 Strategies
13 Strategies
14 Closing Remarks

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 Introduction

To start, I just wanted to commend everyone taking the

time to read this lengthy report and taking the steps to
changing your financial life.

This whole strategy can seem overwhelming at first, but

hopefully after reading this you can understand exactly
what we are doing, why we are doing it, and how to
execute easy trades everyday to finally reach financial
freedom.

Let's do this.

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 Section 1: Options

Options are a financial instrument that is based on the

value of underlying securities such as stocks. An options
contract offers the buyer the opportunity to buy or
sell—depending on the type of contract they hold—the
underlying asset.

However, the holder is not required to buy or sell the

asset if they decide against it. Each contract will have a
specific expiration date by which the holder must exercise
their option. The stated price on an option is known as the
strike price.

In our case, we will not be concerned with exercising

options or anything, and will simply be trading the value or
“premium” of the option.

Options are risky securities as they have expiration dates

and can sometimes go to $0 in value.

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 Section 1: Options

The value of options is split into intrinsic and extrinsic

value

Intrinsic value of the option is usually calculated by the

amount it is in the money.
- A $460 call option trading at $465 will have $5 of
intrinsic value

Extrinsic value or time premium is the premium on top of

the intrinsic value and it varies based on the greeks.
- The extrinsic value of the $460 call may be $0.45,
making the total option value $5.45

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 Basic Greeks of Options

The value of options is determined by their greek values.

The main Greeks we are concerned with are Theta, Delta

and to a lesser extent Gamma.

THETA
As an option gets closer to expiration the extrinsic value
decays to 0.

If our 460 call option expires when the stock is at 465, we

would only have left the intrinsic value, making the call
worth $5.

The rate at which it decays is called Theta.

If theta is 0.20 on your option, the extrinsic value will

decay by 0.20 each day it gets closer to expiration.

In the money options will always have lower Theta values

than out of the money options.

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 Basic Greeks of Options

DELTA

Delta is how much the option value increases or

decreases compared to the stock.

Delta of options can range from -1 to 1, negatives are for

puts as they move inverse to the stock movement.

A delta of 1 means that for every $1 the stock moves, the

option also moves $1.

A delta of 0.50 means that if SPY moves from 465 to 466,

our 460 call would move from $5.45 to $5.95

Closer to the money and in the money options will always

have a high delta and their values will be more correlated
to the stock price movement.

THE DELTA OF A STOCK IS ALWAYS +1

(important for later)

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 Section 1:Options, Calls

By definition, a call option gives the buyer the right to buy 100
shares of the underlying stock at the specific strike price that
they have chosen.

In general, and for simplicity, the value of a call option will go

up if the stock that you bought the call for goes up.

The rate at which it moves is related to theta and delta as we

discussed earlier, and is different for each option.

The price of a call option is called the premium you pay, and
this can be viewed just like a stock.

Let's say you bought a $470 call on SPY, expiring 12/23 on

12/22. This makes the option 1DTE (Days to Expiration).

The premium on this hypothetical option was 0.50, however,

since the call option gives you the right to buy 100 shares,
you will be paying the premium times 100 in total. So this
particular call will cost $50 per contract.

As the stock price goes up, the value of your call premium will
go from let's say 0.50 to 0.60, at which point you can sell and
collect $60 per contract or $10 per contract in profit.

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 Section 1:Options, Puts

By definition, a put option gives the buyer the right to sell 100
shares of the underlying stock at the specific strike price that
they have chosen.

In general, and for simplicity, the value of a put option will go

up if the stock that you bought the put for goes down.

The rate at which it moves is related to theta and delta as we

discussed earlier, and is different for each option.

The price of a put option is called the premium you pay, and
this can be viewed just like a stock.

Let's say you bought a $465 put on SPY, expiring 12/23 on

12/22. This makes the option 1DTE (Days to Expiration).

The premium on this hypothetical option was 0.50, however,

since the put option gives you the right to sell 100 shares, you
will be paying the premium times 100 in total. So this
particular put will cost $50 per contract.

As the stock price goes down, the value of your put premium
will go from let's say 0.50 to 0.60, at which point you can sell
and collect $60 per contract or $10 per contract in profit.

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 Section 2: Delta Options Trading

Now that we know the basics of options and their greeks

we can finally understand the strategy of Delta Trading.
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We learned that delta can be negative or positive and it
dictates how much an option moves.

Once options are sold back to the Market Makers (MM),

they incur the delta of the options.

For example, if I sell them 100 of my $460 calls with +1

delta each, the MM now has +100 delta in their position.

Now that the MM has +100 delta in order to combat this

they must sell 100 shares of stock to normalize the total
delta (Because -100 (Negative for selling shares) times
(+1 delta for stocks) = -100 delta, which gets them to 0
delta.

These creates a sell zone, which creates the upper pivot of

the stock

When puts are sold back to the MM they would incur -100
delta, and therefore have to buy shares, creating the lower
pivot, where they are buying shares.

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 Section 2: Delta Options Trading, VIX

Now that we have found these upper and lower pivots,

using Delta times Volume to find the imbalances and see
where the MM neutralization of Delta will be the highest,
we can now trade off it.

Now, it may be tempting to use the upper and lower pivots

as simple, hard entry points, and while this is usually true,
we must use VIX to confirm our entries.

Below we have some examples, credit to my man

BaldEagles.

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Now, as we can see, SPY tends to obey these pivots well,
and all we need to do is make sure VIX is with us.

Let's take an example on a good VIX entry.

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This is a great example of what we are looking for on VIX.

- Use UVXY, 1m chart, with Heiken Ashi candles.

- The green arrow is showing what a strong uptrend
looks like, from there we see UVXY flatten, indicated
by a blue circle.
- This is your ideal entry, then we see a beautiful Doji,
indicated by the yellow circle, that's your 99.99% Call
entry there.
- And then we see a strong downtrend in UVXY,
indicated by the blue arrow.
- Finally at the bottom of the downtrend, another doji
appears, which is your exit point.

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 Closing Remarks/Tips

This strategy is 99.9999% accurate, and all YOU have to

do is simply trust the math.

Even in the off chance the delta/pivot lets you down, you
have the luxury of being saved by VIX.

If VIX disagrees, simply do not enter the position.

Lastly, I preach this incessantly, and for good reason.

Be disciplined.

This is a life changing formula, take the time to understand

it, practice it, and execute it.

I stick by my 15% rule, start small and compound all gains,

you will be financially free in no time.

Feel free to ask questions and suggest additions, this is a

work in progress for all of us.

Lets fucking go.

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