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That's a terrific demo of your positions and entries. Thank you very much. Wow...once TOS has access to globex, I'm all over that. Question: Why the extra 10 long calls? Were you concerned about an upside breakout and the calls were to mitigate losses above 1320?

POT, POE, etc are derived from formulas, yes. But those formula's include IV, which comes from option pricing, which reflects the sum-total opinions of all the market participants. You ask "why doesn't POE reflect obvious TA like support/resistance?" But the elliot wave guy is saying "Why...

Your quotes are off. ES SEP 1330C is 4.35 x 4.80 ES SEP 1335C is 3.40 x 3.80 ES OCT 1330 is 14.25 x 15.5

Dan Sheridan is a former CBOE MM who does coaching now. He did some webinars for CBOE that you can find here: http://www.cboe.com/LearnCenter/webcast/archive.aspx I was just mentioning what Sheridan does, which is place the short above 1 sigma, typically with a 10-15 pt spread. FOTM, CTM...

Sheridan also places the vertical short at 1 sigma, and if that gets threatened, he rolls out another 1 sigma and doubles the position. If the 2nd position loses, then he calls it quits. In an extended upmove like last fall, you might have gotten zapped on call verticals when adjusted in this...

As Mo's post points out, ES spread margin is better than SPX. How much better also depends on the width of the spread. A 5 pt ES spread will have margin similar to a 5 pt SPX spread (remember that you will need 2 ES contracts to equal 1 SPX). A 20 point spread will be quite a bit higher with...

An update on Coach's ES put diagonal for those interested, since today sees a +10 jump in ES and a 1 point drop in VIX. Original position: Sold 20 AUG ES 1225 Puts @ 8.75 Bought 20 SEP ES 1200 Puts @ 11.00 Net Debit = 2.25 or $2,250 VIX = 14.57 Yesterday (8/1): ES 1276 VIX 15.06...

Your margin doesn't really "go through the roof". It just moves to be similar to the margin requirement for being short the futures contract itself. And futures margins are crazy low anyway, given the power of a futures contract. So the question becomes one of leverage. More precisely...

As requested: ES 1276 VIX 15.06 ES AUG 1225P 3.00 x 3.35 ES SEP 1200P 6.25 x 7.00 Offset the AUG @ 3.25 and SEP @ 6.50 gives a credit of 3.25. +1 ahead of the inital 2.25 debit.

Check out "Trading Options to Win" by S.A. Johnston. Its a good options trading book in general, and he particularly discusses OTM writes on commodities. In fact, he stays completely away from stock indexes. The presence of seasonal and non-seasonal opportunities is one if the nice factors in...

This is not an apples-apples comparison. First, selling a near ATM ES option has almost the same margin as holding the futures contract outright. Which makes sense, as your risk is similar between the two positions. Second, you're comparing an naked option with a spread. That's perfectly...

Today, the SEP1340P is 100 points ITM and is trading for about 93. What can this put possibly trade up to? Anything over 100 is free arb money. I don't see any platinum between 93 and 100. ATM, OTM and many ITM options would certainly have huge premium after a black swan. But we're...

I believe you are thinking of the posts he has made on ratio diagonals. Just imagine for a regular diagonal you were short the AUG1340P and long the SEP1320P with a debit of 1 point. Go look at today's prices for that spread. (For those reading this later...its about 20 points) Now what...

Worst case scenario, you still have a 20 pt spread. So your max loss (barring a failure of the financial system) is 20 points + the debit you paid for the spread. Volatility shouldn't have much effect on options that are deep deep ITM. Although in a truly beserk market, I suppose anything...

Just a reminder of Murray's position: Position #3 STO July 1250p - $20.00 STC July 1250p - expired, pending SET BTO Aug 1230p - $20.90 BTC Aug 1230p - $13.20 Ignoring that SET was 1251, lets just play with the numbers... Lets assume SPX drops to 1230 today. Where would this diagonal...

The P/L of a put diagonal comes from the value remaining in the long backmonth option when the short frontmonth expires. Obviously the value of the underlying is important to the long option value. But the volty is also critical. If you put the trade on during high vol, and the trade ends...

Remember, Phil said "for those trading ES options" :) Overnight margin for 1 short ES 1125P is in the $1500 neighborhood. Even if you don't plan to hold uncovered shorts, futures options give you the flexibility to leg in or out if desired. However, ES options give you fewer choices for...

This trade still has a margin requirement for the 100 naked 1175 puts. If you are going to enter such a trade for a credit of 3.25, why not just do the naked sell? You can sell 100 Aug 1125 puts for 3.25. Same credit. Same margin. Lower breakeven. Same dowside angle on the P/L graph. Same...

I know Phil wants to keep this journal on topic. But he IS the one who keeps talking about feeling a bottom, nailing the bottom, and hitting the target... Plus, its summertime and JA hasn't made an appearance in many months.

How will the ES futures PREM decline affect your position as we move toward the Sept futures expiry?