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My interpretation of Taleb's work is that Tail events are not properly valued nor can they be. Many of the largest trading firms use the black scholes model as the foundation for their own model tweaks to address their perceived inefficiencies. I don't believe there are any liquidity...

In the 1980s, it was open outcry and I could get the edge by being inside the pit. Customer orders were flashed into the pit from a desk and that manual process provided the edge for us. But that didn't stop many traders from blowing up when News came out! The electronic markets today are...

The market maker and broker are the only ones with an edge in this game. There are two sides to each trade and both believe they will win over time. You only have to have a 10 times loser from your short option position to teach you that lesson. Your broker has the added benefit of liquidating...

Risk of an option being exercised after the market closes extends until approximately 5:30 PM New York time the same day. The strategy I like to use when Vols are high is to own the product and sell the at the money straddle and hold it through expiration. Upon expiry, The Stock gets called...

High success does not mean high profits. They have a few large losses that wipe out all the gains. If you ask them them about extreme market moves, they will tell you that noone can predict them and you just have to accept them as part of trading. They will tell you to accept these large...

I would not recommend calendar spreads - they move slow and they have high transaction costs and wide bid/ask spreads so the chance of making money either way is slim. The brokers like them.

Those binary exchanges are not that different from the option market itself. You are right in that they have simplified the execution of straightforward strategies which benefits the beginner. The risk is that it's not properly capitalised and you could lose all your money that's with them. I...

The current market is: Dec9900 = 7 and Jan9950 is 74 so if you did trade your prices listed above, you are down 22.5 in the front month with higher time decay and up 15.2 in the back month for a net loss of 7.3 ticks. This current mark to market for your strategy is consistent with what you...

Volatility trading has been popular for more than a decade for retail investors. There have been many books teaching people how to sell strangles, straddles and iron condors. The idea works after big market moves and high volatility compared to the average volatility of the underlying. I...

The calendar spread is deployed in a sideways market to take advantage of the larger time decay in the front month. The risk to the calendar spread is that the market moves to quickly or goes too far from the short strike in either direction. The risk is limited by buying a long dated option...

The best market to trade as a part time investor would be the Asian time zone which is your evening. Korea has the highest futures liquidity by far and Hong Kong provides fair execution on futures and options on futures pricing for the index. These are both electronic venues with one exchange...

Judgement day is Dec 8th when they delist both the Long and short contract that are down 98% from their highs over last four years. The con is over.

I prefer the static Delta from the underlying product so that there is limited risk to the upside. But there are times where the implied vols of the puts are so high that your idea would be much better.

When there is an unexpected event in the market, the futures move exceptionally fast. The stoploss orders become market orders and they try to get filled where they can. The problem is more pronounced when the market closes and there are gap openings. The execution of orders is never near the...

I would like to think there are many successful professionals who choose to engage in these forums to challenge the status quo and their own views with other Traders. I'm sharing my views/experiences to give back to the community and am open to other perspectives with the benefit for all.

No seasonality with market vols although VIX seems to overstate based on chart. But hard to exploit with spikes being daily event.

Just to add, If you do get exercised early, you will notice the option and stock have disappeared overnight. Some brokers will alert you to the exercise and some will not. Because you get to keep the premium, it's usually a good thing if they decide to exercise early. Since you own the...

The stop loss order always gets filled for a big loss when there is unexpected news events. The successful trader keeps positions small enough that they can comfortably add to their position when there is unexpected news that goes against their core position. They treat trading like a business...

The biggest challenge you'll have with the oil futures is the lack of liquidity when the market moves. Your market orders are not going to get filled at prices that will allow your winners to exceed your losers. Excel allows the creation of macros which can be simply pressing a button to start...

Hi Gloria, I wanted to read the prospectus for your two triple leveraged products and explain the full mechanics to you as to their hedging techniques and see if we can reconcile the use of futures. I was baffled by Bloomberg saying they use futures only and yet their returns of down 98%...