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Of course you're a betting man we all are that's why we're traders! I did understand what you said. But in your post you imply that the SPX/VIX relationship has somehow changed from 2008 to 2015/2016, but it actually has not (unless you look at it in the simplistic % terms like you were doing)...

Thanks Maverick, but I already signed up for the InvestTools seminar, starts tomorrow, best $12,000 I will spend : ) Seriously though, I respect you very much and you are very valuable contributor to ET. But you bashing people's "knowledge" of basics on the other thread, yet based on what you...

And ins co also re-insure their risk by buying insurance on their own policies that they issued...typically at Lloyd's. Which is basically a hedge against worst case risk and they're making money off the spread.

Huh? Why would you use % change in Vix? Vix is already a % (being IV). I thought you had a volatility "model". If it's any good it should very clearly explain you why Vix spiked to where it did in August 2014 vs where the Vix spikes were in 2008. There's a very sound logic to it, you just have...

Isotope, can you share more about what you look for in the relationship. I mean obviously there is backwardation/contango in the vix futures market. But I have not found that to be a great predictor of continuing volatility movement. Is there anything for example in that relationship that threw...

Mav, cmon man your smarter than this. Of course the model itself does not predict price, its just a mathematical construct that describes a situation in this case the market. But the whole point of creating models IS in fact to predict price movement. You said yourself you have a model that...

I think Smart Beta is BS. It's a transparent strategy so why pay extra fee for them to do it when you can just replicate it. Btw you don't have to replicate the whole thing. Check out this article: http://blog.alphaarchitect.com/2015/10/24/how-to-pick-smart-beta-etfs/#gs.HmVTPZg They...

I think the problem is you're looking at positions as static and not active. I.e you enter and then exit at expiration or some profit/loss amount. I don't look at it this way and instead shift the positions. So I'm actually right 100% of the time : ) That produces a very good positive expectancy...

Because (unlike Maverick's model ; ) mine is not 100% accurate. It's % based so I know at certain volatility what is likelyhood of vol going down or up from there. But if I'm wrong I can still manage my "garbage" better than ATM. If you're wrong with ATM you just take the loss. I was playing...

My entry and exit criteria are also based on a volatility model. So are we then trading with the same edge? Why do you assume I'm blindly selling premium every day?

Huh? My one off story was an example of when this strategy can be risky not when it's successful....point was to show OP that it looks like a good strat but it has some hard to manage risk that he may not have considered if he was looking only at recent earnings moved which have been meek...

Ah but my friend I DO know what 2 and 20 is. VN being rich absolutely does matter. Who on ET is trading to prove to the world they are the best and smartest? Probably no one as we are all here to make money. So why not take whichever way can get you there faster. VN traded for 17 years and...

Consistently doesn't mean 100% of the time. But to generate meaningful returns if they key to them is being correct, you have to be correct much more often than wrong (in % winning trades and also avg profit vs avg loss). Yes of course if you're right 51% of the time and have the same hard exist...

Ok let me get this straight: 1) Standard oil's edge was he "bought up all the railroads". How is that elusive? Pretty obvious oil is not going to go anywhere on its own. He just got there first. Now I will agree with you if you say that buying "first" in business/technology etc is an edge in of...

Yes risk management alone is not an edge. But it certainly can be part of an edge specifically: 1) position sizing at entry to balance risk vs return. Obviously if you trade one SPX contract on a $1million account you're never going to blow it up but your returns are going to suck 2) adjusting...

Sure it's a good strategy, but don't underestimate the risk!! About 10 years ago when I first started trading volatility that was one of the first "easy" trades I saw. Well of course things that seem easy at first are not. I doubled my account in few months (first sign your going to get in...

Maverick, you are truly an asset to ET and your patience taking time to answer questions and educate the newbies is awesome and very appreciated. We are going to disagree on some things clearly. I do want to leave you with one thought. As you said everyone wants a cookbook automated money...

Simple is usually the best. I hate to roll, only if I have to. This year only had to in January (watch me say that and the market tanks next week lol). BTW do you trade many markets or just ES/SPX?

I am talking about real numbers. I don't use excel with random number generator because that has never been a good model of the market. I'd much rather use historical data on scenarios and stress test my strategies against those black swan events. Can the market drop 30% tomorrow in a day? Sure...

True, except I never sell straddles. I do of course end up with straddle positions but leg in puts and calls individually. I completely agree with what you're saying, but I'm trying to keep the discussion to the put leg since that's where risk comes from. The calls (at least OTM calls) lose so...