Search results

FWIW, Here is the Australian Stock exchange's explanation of TIMS. Note that IDS says IB has a few "tweaks", whatever that means.

expiry cycle

One sentence contradicts the other. I like options because I don't have to be correct on direction on timing.

I'm not an MM, but as it was explained to me it may not be anything more sinister than option MMs hedging their delta with underlying that causes pinning. As a retail trader, my observation is that sometimes it pins, sometimes it doesn't. :confused:

Of course it can work, but it is not as easy as a lot of the literature makes out. There are numerous caveats. I did some videos on this topic after reading a breathless article on how to get rich quick with credit spreads. Check them out. Part 1...

Ahh I see that you were referring to VIX close... I was looking at intraday. BTW, return kudos for your blog. :) Nice one.

Yeah but which one is the patsy? :p

But it's more of a directional bet. OK if that's what you want, but a different philosophy than straddle/starngle or fly/condor

:) I reckon Dirty Harry would have been a very good options trader. :D

Mark, Do you have a chart showing that? The data I use doesn't show a new low. :confused: :confused: My own surreptitious blog promotion ==> http://sigmaoptions.blogspot.com :D

If the OTMs move in your favour, all other things being equal, it will be moving into the area of maximum theta; which with the Nov will be considerable. If it does it move with a blue flame out of it's arse, fine, take your profit quickly and get the **** out. If it grinds up you get...

That's why the smart bookies "lay off" so they can "pay off" http://en.wikipedia.org/wiki/Bookmaker#Operational_procedures The **equivalent position** of the fly/condor. :D

I like this idea better. You have a de-facto straddle/strangle from a management point of view, but cheap insurance, a lottery ticket even, if there is a black swan event.

I'll use synthetics to illustrate. You own 1000 XYZ and want to hedge it, so you decide to buy 10 puts. So comparing a nearer term put to a LEAPS, the nearer term put has greater gamma, less loss potential and greater profit potential within the term of that put, compared to the put LEAPS. (A...

That's because you are not viewing the option as a derivative of the underlying. What you say is true only if the option is viewed as a stand alone investment. But as we are speaking of "investment", it's the risk/reward on the underlying that is important... as certainly there must be a...

You might want to recheck your assumptions there. Higher gamma in a call gets you fewer deltas as the underlying moves down. In other words it gets you less long, ergo, less loss. (notwithstanding other Greeks)

Yes. According to the Chicago Board Options Exchange, typically only about 30% of options expire worthless in each monthly cycle. Only about 10% of options are exercised during each monthly cycle, usually in the final week before expiration. In fact, over 60% of all options are traded out in...

I have seen that video before (and don't want to sit through it again), but IIRC the adjustment is taking the BWB to a bog standard butterfly once it can be achieved at a net credit. Nice idea, but contingent upon getting the direction right initially with the BWB. Some profit may be locked...

ROFL I hear you mate. :)

People tend to compare holding said options to expiry. There is no law that says you can't roll out the shorter term option (or the LEAPS for that matter) before expiry... lets say 4-6 weeks before. This makes it an entirely different equation. FWIW