Portfolio Management on a Daily Basis (Ep. 4)

[Music] so welcome back to the how to build a portfolio crash course jim schultz here with you guys for the final time inside of this crash course man we've already covered a lot of ground inside of this guy we've already talked about your portfolio targets we've talked about using indexes we've talked about adding individual stocks here in episode number four we're going to talk about arguably the most important part the day-to-day management and my hope is that after this episode you guys will begin to see how everything comes together so let's do it man let's dive right in to episode number four of the how to build a portfolio crash course the day-to-day management all right so the day-to-day management it really boils down to one singular thing you need to identify problems if your strategies are working doing nothing is almost always going to be the move like if things are going well like sitting on your hands and unplugging your mouse is almost always going to be in order but naturally there are going to be times maybe on a daily maybe on a bi-daily basis where things might not be going as swimmingly as you might have hoped so here you need to identify the problems and specifically you need to differentiate between problems at the position level and problems at the portfolio level so position level problems these are usually going to be pretty obvious like they're going to jump off the screen and stick out like a sore thumb it could be a huge move in the stock it could be a situation where one of your strikes has been breached or maybe you've just naturally reached the 21 day marker in that cycle sure some of these are going to be a bit more surreptitious like you know your index individual stock exposure but usually you won't have to go hunting around to find these guys they're going to find you now with your portfolio level problems these should also be fairly clear mainly because you took the time to establish your portfolio targets at the very beginning are you too directional do you have enough theta working for you do you have too much theta working for you these are all going to be common questions that you're going to find yourself asking yourself as you are viewing your portfolio knowing what you're trying to accomplish with your delta and with your theta will allow you to see very easily when things are off target okay so now that we've got our bearings set and we know what it is we're even trying to accomplish when it comes to day-to-day management let's dive deeper back into the position level first off it's important to mention that we've already built an entire crash course around strategy management with the ins and the outs of how to adjust our most popular strategies at tastytrade so i'm not going to regurgitate that here instead i want to offer more of a bird's eye view of your portfolio as it pertains to defined risk strategies and undefined risk strategies okay so starting off with your defined risk strategies these are going to be you know your short put spreads your short call spreads your iron condors etc these are going to be pretty hands off a lot more laissez faire where you just let the trade go and you give the probabilities room to breathe either you take the trade off at your profit target or you end up absorbing a loss now could you adjust these sometimes yes but that's more of an in-depth discussion that we're not going to have here because if we did i would be front running myself before the next crash course that is slated to follow this one so stay tuned for that now with your undefined risk strategies you know your short puts your strangles your ratios etc this is where all the subtlety and nuance is going to start to show up right any adjustment wizardry or management magic is almost always going to materialize with naked positions now again check out the strategy management series for more of the tactical moves that you would actually make but generally speaking from a problem identification standpoint which is our goal here remember it's pretty simple if you're out of the money you do nothing once your strike is hit and things move in the money that's when you act if you're before 21 days to go you do nothing once you get to 21 days to go then it's time to move then it's time to act all right so those are the frontline actions that you're going to want to take at the position level which i would argue should be addressed first if for no other reason then these guys are usually going to be very very obvious but still we have some portfolio level problems that need to be addressed so let's have a look so once all of your individual positions have been taken care of and any and all necessary adjustments have been made here you turn to your overall portfolio at the same time it might not be a terrible idea that as you're making the necessary position adjustments you have an eye on your portfolio targets that way when it's a close call as to what you should do kind of a toss-up either way you can defer to those portfolio targets but if there's ever a disagreement between the portfolio level and the position level then the position level pulls rank like for example let's say you need bullish deltas at the portfolio level but a given position is far too bullish and you need to add some bearish deltas to balance it out here you want to let the position level be your guide first and foremost the reason why is that there is only one way to adjust a given positions situation it's through that given position but with your portfolio as a whole you can always find new trades and establish new positions to adjust your overall levels too then once each position has been adjusted you can look to add new positions to adjust your overall portfolio goals which is pretty straightforward you need positive delta you add trades with a bullish bias you need more positive theta you add trades with positive theta probably of the undefined risk nature so that you can build up theta more quickly you have too much positive theta hey you can close some of your existing trades also probably undefined risk or you can add new trades that are more defined risk so their theta impact won't be too significant couple of things to keep in mind moving forward with this information number one don't feel like you need to nail your portfolio or targets every single day if they're off just a little bit and it takes you a couple of days to bring these things in line it's unlikely that that's going to be a real big issue but number two at the position level you should be able to achieve your desired outcome in terms of directional bias in terms of theta in terms of whatever it is you're trying to accomplish with that one specific position you should be able to do that in the moment you should be able to do that in the here and now it shouldn't take too long for you to course correct that one individual position wow and just like that ladies gentlemen we are done we are done with episode number four we are done with the entire crash course i really hope this gave you guys some new ideas and new insights that you can begin to apply to your own portfolios but if i can ever help in any way please do not hesitate to reach out to me you can email me jay shultz at tastytrade.com we connect on twitter at j schultz f3 whatever is easiest for you is easiest for me and when you are ready i will see you in the next crash course which i don't know when it's going to be ready but when it is i hope i'll see you there you

Channel: tastytrade

Views: 2,785

Rating: 4.9699249 out of 5

Keywords: daily portfolio management, how to manage a portfolio daily, options portfolio management, stock portfolio management, trade management, options trade management, stock trade management, trading strategy management, portfolio management, portfolio manager, portfolio management definition, what is portfolio management in finance, portfolio management course, portfolio management process, how to manage an investment portfolio, investment and portfolio management

Id: XRnUqI06onw

Length: 8min 13sec (493 seconds)

Published: Sun Oct 10 2021