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No, the retail trader sitting at home is the person off whom the MM makes his living. At the most basic level, it works like this. IBM is 100 bid, 100.02 ask. So the market makers are 100 bid, 100.02 ask, which means they're willing to buy at 100 and sell at 100.02 They probably have no...

I dunno, I wouldn't write yourself off just yet. If this is a tech support position I doubt they're looking for option trading gurus. I did a few seminars once at an options prop house for the support people; basically what they wanted was for the techs to be conversant enough in options that...

It's hard to know what was the right answer for this particular guy. But I assume the best answer would be one that shows you understand options as a vehicle for trading premium and volatility rather than as a means to trade the direction of the underlying.

Sorry Xflat, my post was poorly worded and not very clear. Let me try again. What I meant to say was that any of the following factors is associated with higher theta (but they are not necessarily associated with each other): - Higher IV - Less time remaining - Being more at-the-money...

Well now, that's a mighty strange way to reduce theta burn. Mighty disadvantageous way to position yourself for lotsa reasons.

The more your options are at-the-money, the higher their IV, and the less time remaining, the higher your theta The more your options are out-of-the-money, the lower their IV, and the more time remaining, the lower your theta.

I think what Atticus is saying is that if you get far enough along in the learning curve - that is, if you stick around options long enough and become sophisticated and experienced enough - you eventually give up looking for that "perfect strategy" you can execute like clockwork every month for...

Yes yes yes. I couldn't agree more. That's why it's so important for an option trader to understand the intuition behind option math and move beyond named cookie-cutter "strategies."

Yeah, I guess you could say roughly that short otm calls on cl are akin to short puts on stock indexes in that the wrong kind of disaster and panic would make you an unhappy pappy. Short calls are theoretically worse in that crude can go up infinitely while stocks can only go down to zero. You...

Correct. You would be short a CL futures contract at 80, and would lose money when CL goes above 82.40. This is all quite standard. The tricky part is if CL futures are near 80 at expiration. Then you have "pin risk." Since you're short the option you have no decisions to make, but you...

A few people here volunteer their time to answer questions and help steer people in the right direction. But nobody has time to educate a newbie from scratch and answer basic, fundamental questions that you can easily get the answers to yourself with a little effort. A detailed description...

The underlying for june options is june futures.

No. As I explained above, the cash vix is NOT used to decide how much an option is in the money. The futures contract is. If the cash vix rallies to 31, the 30 call DOES NOT automatically become in-the-money. The 30 call does not become in-the-money until the futures gets above 30. That's...

VIX options are exercisable only at expiration. And you cannot buy or sell the VIX cash index. So prior to expiration, the VIX cash index has no practical, usable, tradable, arbitrageable relationship to VIX options. The VIX futures converge with the cash at expiration. Prior to expiration...

VIX is fundamentally different from stocks and commodities in that there is a long-term tendency for stocks and commodities to rise in price. The DJIA for example rose more or less steadily from 41 in 1932 to some 14,000 in 2007. So you could say that these things are a long-term measure of...

As you can see OP - "cash index" means different things to different people. But getting back to your original question, all that matters to you is what "cash index" means to your broker. So to know what you can and cannot trade, you really need to ask your broker for a clarification. Or...

If that's true, then you should be able to make money by reverse gamma scalping - selling straddles or strangles and getting delta neutral at the same intervals you used to calculate the actual volatility.

OP - are you looking for historical data going way back, or recent data and continuing data going forward? The latter shouldn't be terribly expensive from dtn iq for example, if you don't mind a 15-minute delay. I'm familiar with buying historical data from the CME which can indeed be...

Tick data is more detailed than 1-minute data; if you can get the tick data then your charting software should be able to turn that into 1-minute bar charts. DTN iq should have 1-minute data for options, although I don't know how far back they keep it.

The important thing is that at expiration, both the vix futures and options cash-settle to the same price.