Every week, options traders like you are sending in questions like one of these:
- Which options model should I use?
- Which modeling software is more accurate?
- Why are my Deltas different than yours?
To best answer that question, we should leave the theoretical world and move into the real world…
Several of the top performing options traders on our proprietary trading desk have a few things in common:
- Several of our top traders can manage their trades with any Greeks model.
- Their strategies have positive expectancy because of risk control and could be managed effectively using any of the popular options modeling programs available.
- Some of their trades don’t use Greeks other than Delta — and the precision of the Delta value is not a critical issue.
So, if the traders who are generating great returns are not focused on which Greeks model to use and which Delta is more accurate… why should you?
No options model is going to be right every time. They are theoretical. Some may be right more often than others. But, the differences are minor and random.
The top options traders at our firm are not focused on which Greeks model to use, they are focused on excellent strategies to control risk while letting their edge run.
One such trading strategy that fits this criteria is The Heart Friendly Butterfly. This trade doesn’t use a single Greek to open, manage, or exit the trade.
This strategy is managed using price, time, volatility, risk, and reward.
The Heart Friendly Butterfly is a trade that we recommend if you want to make rule-based decisions and be completely objective.
