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Don't look at the option $ because it's meaningless, look at the Delta. Depends on other positions and the VaR as a portfolio, but as a rough guide, I'd run a short option delta < 0.3 and close out a short option delta > 0.8. Anything in between just depends. As I say, look at the Delta not...

Trading DN is not a profitable strategy over the long run, unless you happen to be a broker :D

I do, but not in a day-trading context. If I did, I'd be long options for the reasons given above.

I hear what you're saying, but my point is that you'd make more money going long options. This is because of the inherent curvature (gamma), yet the flip side (theta) is negligible when in-and-out the same day. Nice one. But have you looked how your P&L would have panned out had you bought a...

Have you considered curvature and theta ? If you are intent on day-trading direction using options, you'd be much better off going long OTM options, rather than short.

IV_Trader Correct. But, in order to calculate the volatility of a portfolio of stocks, you must use the correlation values between the component stocks.

More chance of finding a needle in a haystack.

What about Vega risk ?

At the moment, all of them ! :D

On that we can agree. Good luck.

Actually luck does play a roll. Everyone is susceptible to luck, both good luck and bad luck, but over time it balances out. So in the short term any ignorant muppet could do well trading options, but in the long run they won’t. Rather like poker players, every year you see the latest hot...

I think your statement above reveals your true understanding of risk. Good traders are, first and foremost, good risk managers. That you have made 10% a month consistently for the past X years does not make you a good trader. If you have managed to make that sort of return (and I have no reason...

I would venture to suggest it's because they don't know the risk involved beyond 2 x SD. If they ran a 3 (or more) SD adverse move together with a 30% IV shift I think they'd no longer be describing their 10% monthly returns as "safe". A 10% per month return is certainly achievable, but it's...

real***trader You've asked lots of questions. But you might actually get some answers if you contributed something positive yourself to this forum. Now here's your chance..... Hmm, a mean-diversion, eh Pro? I can't wait to hear all about it !

And you would know all about simple wouldn't you CYOF ? Why do you come here ? What exactly is your mission ? BTW, to use the title RPT must be the joke of your laughable "career". Now, having wasted several sentences on you, kindly GFY where the sun don't shine. kind rgds, PT

Not wishing to piss on your chips, but I would be absolutely amazed if that were the case.

Do you pair of fcukwits really think that anybody cares who has a bigger PnL or Tool or Muscles or whatever.....? You have both been very successful in making a complete c**t of yourselves on this thread. Please, give it a rest and contribute constructively. Thanks

Ok, could you at least say whether you think outliers are overpriced or underpriced ?

Care to elaborate ?

Sure, but I don't believe it is a recognised strategy by any of the exchanges, and in that context, it's certainly not a backspread.