Reducing Cost Basis The Traders Edge
Update: 2025-08-12
Description
This Options Jive discusses strategies for improving cost basis in options trading, emphasizing their importance for enhancing probability of profit. Key concepts include using covered calls to improve the effective price (cost basis) of long positions and short positions. The speakers detail the mechanics of these strategies, advocating for trades around expected moves for better outcomes. They also explore options like diagonal spreads and covered strangles that integrate multiple components to maximize capital efficiency. The segment underscores the necessity of understanding risk parameters, including delta and theta exposure.
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