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From Theory to Practice - October 16, 2025 - How Much Leverage To Use: Long Delta

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Manage episode 514059285 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 discusses how much leverage to use in a long delta portfolio, emphasizing a different approach from short delta strategies. Unlike short delta positions where the delta-theta ratio provides protection, long delta positions lack this shield during volatility expansion. For long delta traders, he recommends using SPY as a reference point to measure leverage. A portfolio with beta-weighted delta equal to its notional value in SPY shares (1X leverage) means you're essentially holding the equivalent of being fully invested in SPY. Most traders settle between 1X-3X leverage, with experienced traders occasionally going as high as 5X-6X.
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1634 episodes

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Manage episode 514059285 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 discusses how much leverage to use in a long delta portfolio, emphasizing a different approach from short delta strategies. Unlike short delta positions where the delta-theta ratio provides protection, long delta positions lack this shield during volatility expansion. For long delta traders, he recommends using SPY as a reference point to measure leverage. A portfolio with beta-weighted delta equal to its notional value in SPY shares (1X leverage) means you're essentially holding the equivalent of being fully invested in SPY. Most traders settle between 1X-3X leverage, with experienced traders occasionally going as high as 5X-6X.
  continue reading

1634 episodes

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