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you just answered your own question... the downside to owning calls is you can't hold untill profitable.. the upside is that instead of having a lump sum tied up in stock and a protective put.. which is the synthetic equivalent for a call .. as you stated.. you can diversify with many more...

you can't cancel out vola forecasting in neutral trading.. you'll find similar issues with calling direction in vola as you would direction of stock..... a real market making, dealer.. replicates with static equivalents. "synthetics". such that he is only making the cost of carry many times over...

this paper has it spelled out.. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1103971

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see you guys have been at it.. i've been looking at a dec MA 450/480/510 iron... i'm staying away from weeklys, i think jan might even be better.. these front month/week expiring flys are to much for me to manage.. i need to personally get a little better understanding of where on the term...

i'll check out strangle pricing..

options in that case.....?

Don't worry.. having things to work on never changes....

umm.. when buying a fly your expressing a view on the distribution of prices.. (like any neutral strategy) if your buying a fly that has a month left to expire then throw that fly into the "risk profiler" in tos and see if your profit and loss points on both sides of the fly coincides with the...

sorry i get what your saying... you said something and i went off looking for ways to hedge double touches..

you said this.. so i looked it up.. your subject was the interest related to the lack of fungibility of these .. meaning its a bet between you and one dealer.. why is their interest there.. one dealer can make many mistakes, as opposed to structures on exchanges where mistakes aren't as...

where K > b is an arbitrary strike. The portfolio H II (K) is a combination of initially buying a digital option paying 1 if ST > b, buying α = 1/(K−b) calls with strike K and selling α puts with strike b. Upon reaching b we something like treat the closer side like a single...

why such a short wing spead in the dec aapl fly? with these amount of varience in the underlying... i don't get that..

double no touch... thats some food for thought... sat here and thought about it for a while... i came up with this paper.. i read through the introduction... http://eprints.maths.ox.ac.uk/784/1/nihao_dissertation_project.pdf

DNT = delta neutral trade?

I speculate non of these guys on here know anything at that level...

At what point does gamma risk really become an intolerant issue trading fly's... talking in terms of placement in the term structure.. front month...? Of course weekly but... just wanna hear you guys opinions

I don't get what it means to be "short call skew"

thats a very simple question... options are more expensive the farther you go out in time.. obviously there are many ways to explain why.. but simply .. the more time, the more probability they could go into the money. hence them being more expensive.. expensive is a relative term.. meaning...

heres a good question if anyone cares to elaborate.. i was thinking about a butterfly in terms of the term structure.. close to expiration it becomes more of a play on gamma then it does on volatility.. i'm assuming.. this as well depends on how wide of a wingspread you have.. the wider...