Recent content by tower

You can bid and ask on the same option. Market makers, however, can do this on every option. In general, non-market makers are limited as to how many markets they can quote.

It is what we call it when a cash player (in this case Kraft) tries to get in the way of a rally in a feeble manner. It is a reference to the Maginot Line. Tower

Blocks and barrels are tight, whey is still over 50 cents and Class IV is over 21 in the front. This is pulling raw milk from the III's. Blocks seem to be particularly tight. On both thursday and friday Iowa was able to walk up the cash in blocks without any challenge. Kraft sold a barrel on...

When you are talking about the S&P's options or Euro's a lot of the guys do play for pay. But the majority of us are on our own.

I am not sure what you mean here. Locals almost exclusively trade their own money. Very few money managers work on the floor - at least in the Ag's. Unless what you mean is that most of the guys on this forum trade for funds.

One of the biggest differences I have noticed about locals vrs. off the floor guys is that locals seem to be far more sensitive to day-to-day fluctuations in their net liq. When I get off the floor I do three things: 1) Calculate how much money I made or lost 2) Input my trades and...

Major: I have never considered the ratio you describe. To be candid, I have never even thought about the timing of theta in that way. Because of this I asked the two largest vol. sellers I know about it. One said he didn't do it this way (though he was familiar with it) and the other was...

I agree with much of what you say here (we it "eating like a bird and crapping like an elephant"). With regard to keeping a position concentrated - that is a rather difficult thing for someone to do on the floor. It is fairly straight-forward for someone to maintain both a delta and gamma...

I agree that short vol. is not inherently bad. Rather, that if you are not on top of it when the market turns, it chews up your position rather quickly. Positions do get extremely difficult to manage on the floor - at least during the day. This is only because so much is going on right then...

The trade is the Dairy options at the CME. A fairly illiquid futures market where volatility isn't usually a very big issue. We kind of drift back and fourth - moving 10 points up or down a day. This is not a tremendous loss for him (about 8%) - though it is the largest loss he has yet...

I am relatively new to this forum and realize that most here believe that trading short vol. is the most reliable way to profit in options. I think that trading short vol. requires far more skill than most traders have (or even realize they need). I am a floor trader at the CME. Our contract...

Daddy'sboy: I agree it would be quite impressive if the guys we worked with were profitable within the first sixty days. Sadly, that is not the case - or even close to it. Where I work about 1 in 15 options traders survive the first year. As I recall, I started making money after six...

Daddy'sboy: We do it on a rolling 12 months and not on a calendar year basis. The closest we have to someone in the position you describe is someone I have started training. I just looked at his position and he has about 5% of his account at risk.

A5: I am not sure this answers your question directly but I can tell you that a rule of thumb we use is to never risk more than 1 months profit per day. So, if you make $10,000 per year, we would never have a position on that exposes us to more than an $833 loss in one day. That said...