Buying and selling binary choices isn’t nearly making bets — it’s about managing the dangers.
Delta Hedging
Delta measures how a lot an choice’s worth strikes relative to the underlying asset. For binary choices, delta explodes as MSTR nears the strike worth.
Problem: Speedy worth modifications can wipe out income.Answer: Use dynamically adjusted vanilla choices to neutralize delta publicity.
Gamma Administration
Gamma measures how briskly delta modifications. It’s the second by-product of the choice worth, and it spikes close to expiration.
Problem: Excessive gamma will increase volatility in your portfolio.Answer: Add ATM (at-the-money) choices or widen the decision unfold to clean out spikes.
Bitcoin Correlation
MSTR’s robust hyperlink to Bitcoin means you’re not simply buying and selling a inventory — you’re buying and selling Bitcoin’s volatility.
Hedge: Use Bitcoin futures or choices to handle the broader correlation danger.
