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Talking about favorite optons strategy ? Here is one of my favorite, it is called Calendar Ratio Backspread, it is not as complicated as it sounds. Why I like it: just two legs, very limited downside, lot of upsides, very low to none time decay, What I don't like about it ( there is...

Here is the chart,

The issue with selling verticals is that profit ( if you are right on the direction ) become larger only during very last few days.

I bet you don't like the RR. The Dec 38/40/42 long butterfly make more senses. It gives you at least 15:1 RR and profit zone: 38.1 - 41.9 that should meet your original plan. Check following chart, which shows the position with just one day left.

When I trade options, no matter what I do, I always leave no less than half of my potential gain on the table. Many times, I leave more than 80% on the table. The daily fluatuation of gain and loss are just too much.

For me, it is the feeling of regrets, what is yours ?

I remember there is a book called Options' Edge that talks about how to hedge a short straddle positions. However if underlying make two big moves in both direction by going up then going down or verse vesa, the hedge will lose.

To analyze a particular options strategy for a specific stock, just go to http://www.TheOptionsLab.com see if it helps or not.

It really depends on his market view. If he is a little worried and just wants to neutralize his position, selling ONE DITM AUG put will do. Thanks,

The Options Lab is also free for private use. We are adding new features to it several times a week.

Guys, Just because I mentioned some tool by name, it does not mean I don't want to start a serious discussion. I want to make sure the trades/strategies I mentioned are backed up by real data and real analysis. personally, I have been trading options since 1995. I saw that too many options...

To SteveGoTex, Do you mind offering the links to the tools you just mentioned ? That will help everyone.

I always try to close the short legs when opportunity presents. I regret much more if I did not do so. Here is one example, when I did a Call calendar on GLD earlier this year, my short calls drop from 1.7 to 0.15 after less than a week I sold them. I thought about offsetting it, but since...

Here is what I used to do, sell a ES put and put rest of money into T-bill. Since ES options has te same margin requirement as a ES futures about 5% (Now they increase the margin requirement to 10%.) , so I can put up to 95% into T-bill. Even the position is fully covered, it sometimes still...

Actually, I like the idea because very likely the risk/reward ratio will be the same when you combine those two strategies. I just don't like the fact that so many legs are involved. Regards

Mark, Thanks for mentioning this. I agree that both Calendar and condor positions are supposed to be done as delta neutral spread. Regards

Mark, Points taken, Thanks

SPY is at 100.41, let's say you think SPY at least won't go down much from now until 03/1020. And you want to go long by selling 10 puts. With 100 2010 March put at 8.4, the Options Lab will calculate its IV at 28.46%. Uncheck the Call, and you will see the Theta for 10 short puts is $18.38...

Or you can use a small margin to sell a DITM leap puts and put of rest of money to buy CD. The key is small margin, don't be too greedy, otherwise you will lose both.

Many people asked why Options Lab only take four legs ? To answer the questions, let's start from basic. In theory, number of Options Strategies are unlimited or as people say, are only limited by your imagination. In practice, there are about 56 to 64 common used strategies where the...