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Regarding our discussion of a call vertical with a put diag combination. The call vertical is helped by the vega, but, at the same time, hurts the put diag, and the gamma hurts both the vertical and the diag. The position appears to get very ugly on bullish moves, even with decreasing IV...

I received the following from TOS: "Interestingly enough we have been discussing this of late and we expect to bring out futures options next year. As to margins, SPAN is the only permitted margining system for the Globex options, so we will be employing it."

Someone asked for articles on calendars and diag spreads. These articles may be of interest (from the viewpoint of chartbender software): http://www.chartbender.com/nla/

>You can use the software for free for 10 days before funding the account. Its a no-brainer. I have to agree. It takes awhile to learn the functions and nuances of the analysis tab. For example, if you get an immediate loss on the position, you have to troubleshoot to see what went...

>Thanks for the risk profile and you're probably correct. Its probably due to the fact that the distance between my short strikes is 125 pts. My take on it. The double diag, unlike the IC, does not like FOTM since you want the market to approach one short or the other. And =not= in the...

Let me think about this. The implication is that when you open a calendar, it would be better, all things equal, to open it slightly above the market. If market goes up, you benefit fr gamma, if down, from volty. Does that make sense?

A final report on my IWM dual calendar, Aug/ Sep 66 and 69 put spreads. After closing out the 66 leg, I nursed the 69, trying to get at least a 10 cent profit. Very instructive on how vega and gamma loss can outrun the theta gain, even in the last week of expiration. Final outcome was...

update: Original position, IWM aug/sep 66 and 69 put calendars. Market moved up briskly and had to liquidate my 66 put with a 25 cent loss, and left my 69 put on. The loss basically balanced out the gain on the 69 put, and I am at break even. Will give it another day and see if I can get...

I heard an interesting comment from a state champion wrestler: "At the beginning I thought I could get through with only instinct and determination. But I quickly learned to listen to my coach -- what to do when I got into certain situations."

>There are no "quotes" for speads, only taking a combination of quotes for the options themselves. It's called the natural bid/ask. I spoke with TOS about this. They indicated the natural bid/ask is indeed from different exchanges, and can only fill a spread from one exchange. However...

You get what you pays for. You can get free advice here, and end up paying $5000 in "tuition" to the market (losses) in three months, or pay it to a mentor with over 20 years experience on the floor. I am not addressing you specifically, but new traders in general.

http://www.optionvue.com/Education_Sheridan.aspx Listen to his webcasts and see if he is what you are looking for.

Sorry, you already know these things, but I am just thinking out loud in case I have something confused.

>Obviously the further out the back month the greater the initial debit - but you have to balance that against estimated multiple roll credits to evaluate risk/reward. A further month spread also means greater vega risk to that larger debit. Be sure that you are at the low end of IV. > I...

Good to talk with you again, Sailing. Over the past couple months of trading these positions, a few observations (ignoring IV for the moment): 1. The IC is neutral, poor risk reward. Very weak at the extremes as they approach the shorts, but strong in the middle. Max profit anywhere...

At the beginning, I have just one calendar and wait to see what happens. When approaches b/e, I then make second calendar to even it out. If market then goes out to my b/e for a second time, I'm out. Hopefully small or no loss since I monitor carefully the b/e. Of course the first couple...

Question: anyone can give me some hints on what criteria they use to decide whether to do double diag vs calendars. thanks

I see chop. I read elsewhere that Buffett sez that the market will be relatively choppy for the next several =years=.

Check out thinkorswim. They have some great tools for option traders.

I opened up a small account with brokersxpress (exactly the same as OX, and got chartbender for two month free. Still looking at it. mcavanaugh@brokersxpress.com