Is technical analysis ineffective in options trading?

We often say that the profit and loss of options at maturity is nonlinear. The influencing factors of dynamic profit and loss are also complex. The factor pool is multi-dimensional, and the factor contribution changes dynamically. Changes in option prices occur due to characteristics that linear assets such as futures and stocks do not have. The moving average theory, K line, and many effective technical indicators are overshadowed in option price analysis and investment strategy planning, and traditional technical analysis can no longer be transferred to the analysis of maturity price.

Gamma measured the acceleration of directional profit and loss of options, and Vega and Theta achieved quantitative analysis of implied volatility and marginal premium over holding time, respectively. To a certain extent, Vega and Theta measure the strength and weakness of implied volatility changes and the passage of time value. Vega and Gamma profoundly reveal the nature of risk in comprehensive position management.

Risk management and wealth management in the form of technology

Although technical analysis cannot be directly transferred to regular analysis of option price trends, it can be used as a tool for analyzing target price trends to provide ideas for options strategy construction and support the selection of options contracts.

Options sellers have a certain margin of fault tolerance compared to futures. When it comes to high-probability futures strategies, options sellers are innovating strategies to make up for relatively low profit and loss. At the same time, for futures strategies with high profit and loss ratios, option buyers have limited risk and can effectively make up for the shortcomings of insufficient win rates.