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delta and vega neutral portfolios with gamma are not exposed to overnight risk at nearly the same level of a naked put position. i could write a 10 page essay to tell you the difference, but i'd rather you reread your options books, coach.

no, it's not. think how that position reacts if there's a gap overnight.

the full risk is obviously not $0. you're taking my words and twisting the message all around. and you have not read my message correctly. i said it was safer. i never said it was risk-free. big difference.

i don't think he's hedging at all. it has nothing to do with what he's doing because he's not doing it yet! but it has everything to what he's asking, which was "how much money do you put in options?" he's a beginner wanting to learn, so i just gave him basic information on where to...

risk in options is not defined by how much % capital you put in, but by the greeks that you hold. if you put 100% of your capital into a hedged option position that's pretty delta and vega neutral, that's a lot safer than putting 10% of your capital into a naked position that has maybe, say...

dare you to short a ton of the 45 level calls.

here's a secret: it's not always "fundamentals." :)

yu dee chang's strategies are good, but he's a little more aggressive than others. for a premium collecting-based fund, he sure takes in some heavy delta risks. high risk is in his blood. he's asian.

what implied volatility were those trading at?

many people are intimidated by shorting premium. they have probably been awfully burnt because they had little discipline or demonstrated remarkable stubbornness. these are characterisitics that are simply unacceptable. ansbacher's approach is actually far more "conservative" than most...

institutions are using variance swaps, and the public retail guys aren't really playing either due to lack of sophistication or under-capitalization. spreads aren't particularly attractive neither.

plug in historical implied volatility

if i knew of no other profitable system for trading, i'd employ a premo-collecting based strategy, and i'd probably make money every year. the strategy is not really that hard if you find the right index to play with. avoid the juicy high iv's that swing. if you're doing this for some nutty...

if you know you won't be getting bought in, you'd do a gazillion reversals. but it doesn't really matter at this point since it should be on the "hard to borrow" list for most firms already. shorting the calls wouldn't be effective neither because those will get exercised, probably as soon...

the synthetic is still at a discount, but you can't secure stock.

http://www.microhedge.com/

taleb is so incredibly overrated. he's an extremist who only sees black and white and refuses to inspect any of the grey. not saying his stuff are completely weak because he does make sense on some levels, but still, he's one of the most astoundingly close-minded ego's to ever print any...

actually, it's more like the opposite. the stronger the rally towards the close, the bigger the profit-taking sell-off. we're not in a bull market.

doing that will basically make you long a call spread (or short a put spread) and also short 50 shares. at those prices, if everything goes smoothly, almost any point should be a credit level except for the region beyond the upper limit that you've stated. your main risk of concern though, which...

kmg 79.52 May contracts strike: (call, put) 55: ( 23.9-25.1, NB-0.25 ) 60: ( 18.9-20.1, NB-0.25 ) 65: ( 13.9-15, 0.15-0.25 ) 95: ( NB-0.05, 17.2-19.5 ) with the current kmg option prices, you can put on a reversal with the 95 strike and basically load up the synthetic for less...