Option traders generally use what are known as Greeks—delta, gamma, theta and vega, which help measure the sensitivity of an option’s price—to deploy strategies, but Abhijit Phatak, research analyst at Define Edge Solutions, said there are unconventional ways to achieve the same.
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Straddles and strangles—which are strategies that involve buying and selling calls of same and different strikes, respectively—can be used by focusing on charting pattern and price actions, Phatak said on the sidelines of Algo Convention 2019.
He said charts can be used to plot straddles and strangles as they give an objective entry, stop loss and exit based on option premiums.
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