Ep14 - Greek Geekery and Skewed Truth

Episode Summary: In this episode, Dan dives into one of the most misunderstood aspects of options trading: the Greeks — and more importantly, where the real edge in trading actually comes from. Contrary to what many novice traders believe, theta is not the edge. The real advantage lies in volatility and skew.

With practical examples and 30 years of trading experience, Dan breaks down how delta works, why traders often misinterpret theta, and how cash-secured puts and covered calls use volatility pricing to your advantage.

In This Episode, You’ll Learn:

• Why theta is not a reliable trading edge, despite popular belief
• How delta works in directional trading and how to simplify its meaning
• The true nature of short puts and why they behave like bullish stock positions
• How risk premium gives option sellers an advantage
• Why options behave like insurance policies — and how that helps traders
• What volatility skew is and how to recognize it
• How covered calls and cash-secured puts benefit from implied volatility mispricing

Key Concept: Delta isn’t just a Greek — it’s the sensitivity of an option’s price relative to the underlying stock. When you understand how delta mirrors share ownership, your perspective on options changes completely. And when you understand skew, you start trading with a real edge.

Additional Resources: To access bonus video content, trade adjustments, and subscriber-only episodes, visit: wealthbuildingwithoptions.substack.com

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Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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