A surprising outcome for some of my defined-risk long delta trades this week is that my losses weren’t as pronounced as I would’ve expected given the vicious sell-off we’ve seen in many tech names.
Why?
One thing that isn’t often discussed about being long options premium when expressing bullish or bearish bets is that owning long options (calls or puts) also means we’re long volatility.
In situations like these where we saw VIX briefly with a 65-handle, the rapid rise in options premiums put a floor in many of the calls I had long positions in. So while many bullish positions in my portfolio were losing money, the losses were rather pedestrian relative to what others who were holding long stock or futures positions were likely experiencing.
It’s not a win, but it felt like one this week.
We discuss this and a whole lot more in this week’s Options Jam Session:
