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From Theory to Practice - October 15, 2025 - How Leverage Should You Use With Short Delta?

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Manage episode 513814695 series 68544
Content provided by tastylive. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by tastylive or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.
In today's From Theory to Practice, Dr. Jim examines how much leverage traders should use in derivatives trading, emphasizing the importance of the delta-theta ratio for short delta portfolios. He recommends targeting a 0.5 ratio (one short delta for every two positive theta), with portfolio theta levels between 0.1% to 0.5% of net liquidation value based on experience level, account size and market volatility. The session highlights how VIX levels should influence position sizing, with higher volatility periods warranting more aggressive theta deployment.
  continue reading

1666 episodes

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Manage episode 513814695 series 68544
Content provided by tastylive. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by tastylive or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.
In today's From Theory to Practice, Dr. Jim examines how much leverage traders should use in derivatives trading, emphasizing the importance of the delta-theta ratio for short delta portfolios. He recommends targeting a 0.5 ratio (one short delta for every two positive theta), with portfolio theta levels between 0.1% to 0.5% of net liquidation value based on experience level, account size and market volatility. The session highlights how VIX levels should influence position sizing, with higher volatility periods warranting more aggressive theta deployment.
  continue reading

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