The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about Beta weighting after adjusting or hedging positions. This question comes in from one of our members as always and he said, “It works great assuming that you're never going to sell the inside legs of a position, potentially roll, ladder or adjust. No platform is mature enough to Beta weight after any modifications.” For example, if you roll several positions that you have been laddered or adjusting into over the next month, it will skew your next month’s Beta weight. Basically, how do we account for this? How do we look at and monitor Beta weighting after making adjustments? Well, I think the easiest way to do this is basically to either un-toggle or uncheck the positions that caused your portfolio to be screwed up for Beta weighting purposes. Now, the idea here is that many platforms like Thinkorswim, when you make an adjustment and you now have existing positions that are on that