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Here's a discussion on the topic you may find useful: http://www.wilmott.com/messageview.cfm?catid=4&threadid=3656

This is an excellent demonstration why all those ads and emails from those claiming they have a great trading system with which they've taught 91 year old grandmothers to make steady income trading options are all a bunch of crap. Yes, trading successfully is HARD! If you have guru-level...

I posted a brief youtube video on what can happen if you don't pay attention to greeks when trading options: http://www.youtube.com/watch?v=tEokbHqSp9o For a more in-depth explanation you can watch the video I posted at http://masteroptions.com/?p=3

Actually you add the call delta and the put delta, keeping in mind that the put delta is negative.

So many want to believe that there is some simple formula that will give them an edge and can be repeated mindlessly. Good luck with that.

Sure. ITM calls can be expensive (high IV) or cheap (low IV). To give an extreme example to illustrate, if you sold ITM calls at 500% IV, you would have an edge. If you sold ITM calls at 1% you would not have an edge. The buyer would. Everything has a "fair price." You have an edge...

Because he has no clue how to get an edge so instead sells misinformation to gullible people.

You can't find an explanation of what a put and a call are? Or is there something else you can't figure out?

If ABC stock is at 120 and IV doubles, then the 120 (ATM) calls and puts will approximately double too. The OTM options will more than double. The MORE otm the option is, the more its price will increase on a percentage basis. So if you take a series of options, from ATM to far OTM, and...

If IV on the SPX goes down, then the VIX will go down, so you might expect that a put on the VIX would be worth more. But in reality, the IV of your VIX put would probably drop too. And time would pass. So you might experience exactly the same thing as you did with your calls - right on...

Free Thinker is right in saying vol crush, and a week of time erosion didn't help you any either. Of course it's the IV of the option itself that counts. The VIX probably correlates to some extent with IV on your option, but it's not directly relevant.

Well, you know what the model's assumptions are. So if you can point to one or more of those assumptions and have a firm conviction they're wrong, then you've decided that the option is either overvalued or undervalued. Once you've decided that, you have a pretty good clue what to do next...

If we're talking about, say, gold futures and options on futures - buy a gold call and sell a gold put of the same strike and you are long the synthetic futures contract. Sell a call and buy a put of the same strike and you are short the synthetic futures.

Ha ha - well put.

That's why he makes his living as an options "guru" as opposed to an options "trader."

Free Thinker, rather than argue theoreticals, let's look at facts. Are you truly unaware that zillions of people have gone bust selling puts? Are you saying that can't happen? If you have the discipline to limit your option selling to puts on assets that, if exercised, you would be happy...

Even if that statistic is true, it is meaningless. Had you sold hurricane insurance policies in New Orleans for the years leading up to Katrina, they all would have expired worthless. But Katrina would have wiped out all your profits in a day, and then quite a bit more. Same for oil...

You could start with this short video I made on trading VIX futures and options. It's free and I have nothing to sell. http://masteroptions.com/?p=82 If you want to go more in depth about option pricing itself, you can watch the video at http://masteroptions.com/?p=3

Let's say XYZ is at 100. The 90 puts are otm, the 90 calls are itm. If interest rates are zero, they both have the same theta. That is because they both have identical time value, and thus equally far to fall to reach zero time value by expiration. But if interest rates are greater...

It's for their employees only.