The Options Playbook Quotes

“You want to buy a LEAPS call that is deep in-the-money. (When talking about a call, “in-the-money” means the strike price is below the current stock price.) A general rule of thumb to use while running this play is to look for a delta of .80 or more at the strike price you choose. Remember, a delta of .80 means that if the stock rises $1, then in theory, the price of your option will rise $0.80. If delta is .90, then if the stock rises $1, in theory your options will rise $0.90, and so forth.”
― Brian Overby, The Options Playbook: Featuring 40 strategies for bulls, bears, rookies, all-stars and everyone in between.

“you are trading shorter-term options, changing interest rates shouldn’t affect the value of your options too much. But if you are trading longer-term options such as LEAPS, rho can have a much more significant effect due to greater “cost to carry.”
― Brian Overby, The Options Playbook: Featuring 40 strategies for bulls, bears, rookies, all-stars and everyone in between.

“what this talk about gamma boils down to is that the price of near-term at-the-money options will exhibit the most explosive response to price changes in the stock.”
― Brian Overby, The Options Playbook: Featuring 40 strategies for bulls, bears, rookies, all-stars and everyone in between.

“I want to reiterate that the “textbook definition” of delta has nothing to do with the probability of options finishing in- or out-of-the-money. Again, delta is simply the amount an option price will move based on a $1 change in the underlying stock. But looking at delta as the probability an option will finish in-the-money is a pretty nifty way to think about it. And if there’s one thing I want to encourage in this playbook, it’s nifty ways of thinking about options.”
― Brian Overby, The Options Playbook: Featuring 40 strategies for bulls, bears, rookies, all-stars and everyone in between.

“Implied volatility is expressed as a percentage of the stock price, indicating a one standard deviation move over the course of a year”
― Brian Overby, The Options Playbook: Featuring 40 strategies for bulls, bears, rookies, all-stars and everyone in between.

“So when implied volatility increases after a trade has been placed, it’s good for the option owner and bad for the option seller.”
― Brian Overby, The Options Playbook: Featuring 40 strategies for bulls, bears, rookies, all-stars and everyone in between.