If you are interested in the video above, there are other arbitrage videos for crypto, as well in the same YouTube channel.
But what is interesting I would like to highlight is, the Greeks are not unique to options.
In fact the Greeks are a portfolio's risk sensitivity, and because of that, some positions without options can still incur theta risk as well.
The main Greek is delta for delta one products, but there can be carry, for spot, it's mainly rollover tom. Hence there is theta/rho. Theta is a function of rho and time and in options other factors like vols and spot to strike distance.
So what's interesting in such is that if you are day trading only, you do not incur the rollover tom for specific brokers, but if your locks and rescues go over the day, you can incur theta cost, but sometimes, you get paid rollover tom, so the catch is here, if we can figure out more candidate instruments which can be used in such fashion, locks can have even more potential strategic usages. Provided cost of carry for lock is bleeding in your favour.
So alternative to using options premium to reduce spot loss, perhaps using locks this way can lock in delta, but still incur theta positive carry.
But what is interesting I would like to highlight is, the Greeks are not unique to options.
In fact the Greeks are a portfolio's risk sensitivity, and because of that, some positions without options can still incur theta risk as well.
The main Greek is delta for delta one products, but there can be carry, for spot, it's mainly rollover tom. Hence there is theta/rho. Theta is a function of rho and time and in options other factors like vols and spot to strike distance.
So what's interesting in such is that if you are day trading only, you do not incur the rollover tom for specific brokers, but if your locks and rescues go over the day, you can incur theta cost, but sometimes, you get paid rollover tom, so the catch is here, if we can figure out more candidate instruments which can be used in such fashion, locks can have even more potential strategic usages. Provided cost of carry for lock is bleeding in your favour.
So alternative to using options premium to reduce spot loss, perhaps using locks this way can lock in delta, but still incur theta positive carry.
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