Thanks Subhadip.
However I am not referring to that video. What I meant to ask is if you want to control Delta and Vega what will be strategy you employ.
Anyway coming specifically to my problem. Assume I buy Bank nifty Monthly Put with 60 days to expiration and I sell nearest Weekly Put on the same strike price (Horizontal Spread). What is the worst thing that could happen to this position the next day ? One thing I could think of is market gapped up by 1000 points then I lost my entire bought premium against a small premium gained by selling. What are the other risk that need to be taken care.
However I am not referring to that video. What I meant to ask is if you want to control Delta and Vega what will be strategy you employ.
Anyway coming specifically to my problem. Assume I buy Bank nifty Monthly Put with 60 days to expiration and I sell nearest Weekly Put on the same strike price (Horizontal Spread). What is the worst thing that could happen to this position the next day ? One thing I could think of is market gapped up by 1000 points then I lost my entire bought premium against a small premium gained by selling. What are the other risk that need to be taken care.
As per the video, the adjustment was just shifting to lower PE when price was coming down... May be that was also wrong..
Some how my feeling uncontrolled Vega was also big problem due to big Vomma, when price is coming down with delta adjustment only will not have required effect.
Some how my feeling uncontrolled Vega was also big problem due to big Vomma, when price is coming down with delta adjustment only will not have required effect.