Recent content by TD80

Bobby you are going to be just fine, you have an eye to risk and it sounds like a SHTF plan as well, those are the key things missing from both TT (they espouse to not touch or to just keep rolling out/down when things start going wrong) and from Karen's original strategy. I think people are...

To mitigate convexity risk while doing naked strangles, one needs to keep the leverage pretty low. If you buy wings, this negatively impacts your total credit but helps with convexity (if done right). So in order to get a reasonable yield with wings given the debit paid, you have to do more...

If you are going to use a lot of leverage, you need wings. Of course by buying wings, it also takes less of a move for you to go to 0 in your account. Wings should = leverage, but also wings= no one is coming to take your house, you just go to 0 in the account if the worst happens. In...

I love the idea of being negative delta, it (essentially) eliminates crash risk. The problem is you are fighting inflation all the time, now as you say if you end up in a deflationary spiral you will look like a genius but I don't see how that is as of yet our market condition in the US. You...

I think Bobby is playing for theta, IVR being high *may* be a bonus as it *could* lead to a subsequent volatility reversion which would then at that moment enhance his return, however make no mistake that on indexes you will make more money over the long haul constantly selling for theta and...

This may be of some interest (I neither endorse nor deny TT methods, but occasionally there are some interesting research notes) : https://www.tastytrade.com/tt/shows/market-measures/episodes/covered-strangles-short-stock-09-28-2016 At least in broad American stock indexes, which have a very...

The problem here is that one can end up getting really crushed on a meltdown. One-way directional risk of accelerating magnitude can bury you if you keep rolling down/out. I'm sure some people got murdered in oil when that thing trended one-way in a death spiral trying to roll down/out on the...

The whole key to this thing is managing losers. This is a huge point of disagreement between myself and Sos. Anyone who has done this long enough will realize that convexity kills, it not only kills if you are leveraged, but it kills your average return over time even if you are cash-secured...

Well, with portfolio margin on an index you will (note I am not recommending you do) have the ability to sell up to 5 times the value of your cash holdings. So if someone has 1,000,000, they could in theory sell options that equate to 5,000,000 notional. So if he uses 35% of 5,000,000 that...

I just use an option calculator but yes. If the underlying drops 20% it isn't the vol number you will be killed on, I mean you could go from a VIX of 12 to 120 in a straight line and it only increases the pain a fraction since the option will be so deep in the money anyway (at least for the ones...

You aren't even going to come close to blowing up if you are using 35% of buying power (assuming your effective BP is 5x1 naked short selling options). That isn't even 2x1 in terms of the underlying. The question will be at that leverage rate, are the returns making sense. Even with an ideal...

sle I've only been around since 2000 in terms of trading, so I'm curious if you have seen before then some oddities I have not. If one isn't selling too deep out of the money (say in the 15-30 delta range), I would (perhaps falsely) assume that it couldn't get too far out of hand simply because...

I think there is a soundness to selling premium, just like there is a soundness to selling car insurance. I basically see it as you are trying to capture theta (and sometimes a crush in vega), meanwhile isolating all other greeks (delta and especially gamma being the ones that kill). There has...

Day trading and trends don't belong in the same sentence. I merely mention Soros as other people were discussing him earlier in the thread, and I believe he is someone who understands trends quite well, whatever term he happens to use for them. Daytrading is about order flow and program...

Trends exist, people get too focused on just price data and "charts" and such and don't really understand the mechanics. The best trends are where you have an imbalance that will create a vicious (virtuous) cycle, that as price tries to move to balance it, it becomes more imbalanced. For...