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If volatility is declining you want to be a seller and if it is rising you want to be a buyer. Provided all of the other assumptions line up in the trade you want to take. A lot of people just look at a static volatility number and think it is high or low and trade off of that. As you will...

Just make sure that you don't think that you can trade the IB every month. Try and wait until conditions are right: IV declining, flat skew, etc.. Then put your fly on with wings at 1 standard deviation (set for 18-20 days since you won't keep it to expiration), flatten your delta and most...

Bounce

Market makers don't throw a switch at the end of the day to pull the theta out of the position. They pull it out throughout the day and they will also widen the bid ask spreads. That is why people that sell on Friday afternoon thinking they will get two days of free money, are suprised when...

Sorry, didn't realize that you were talking about gold. I don't trade it but I think it actually has a skew in both directions. Stocks typically drop vol going up and gain it going down. A lot of commodities gain vol. up or down (or up instead of down like bonds). You are right, the increase...

While I am on my soap box, I will add that I learned the hard way that the risk graph you see in thinkorswim or any other options platform is an illusion. Especially when you have a multi leg option position. Everyone is drawn to the expiration graph and in reality, few of us hold a position...

You probably already know this but you should really understand the TOS platform before you start putting on trades, especially multi leg short gamma ones like a condor. Do you have a plan in place if the underlying makes a strong move and you are not sitting in front of your computer? Are you...

If it is for a few days, you might be better off just buying the futures or an ITM option. Every time you add an option, you are paying the bid/ask spread and you are altering the greeks of the position. Unless the options are overpriced, you really won't get much help from that short option...

Just saying to be careful if you are buying an OTM debit spread and the short is only worth .10-.25 for example. You are capping your gains instead of just owning the outright long option. On a separate note, I see so many traders keep a credit spread on way too long trying to wait for that...

I have seen a lot of traders that are very successful just trading verticals. If you have a bias of where it is going then buy an option 1 strike in the money and sell an option 1 strike out of the money. If the conviction is strong, buy an otm vertical (provided the short option makes a...

I don't think that back month vertical will help you since you are closing it out that day. Even if you get close to the mid price you are still paying for bid ask on two options. Plus that vertical will have a lot less gamma than your straddle since it is in the back month. What I have...

Actually a butterfly and iron butterfly are synthetically the same. The difference is that instead of using all calls for example in the iron butterfly you would use a bull put vertical and bear call vertical. The call butterfly is for a debit with max profit at the short strike (strike...

I understand and feel the same way. I get nauseous looking at a T+0 line that drops off a cliff. That is why I buy additional otm longs especially on the put side. However, the key is that it is only a part of your overall portfolio/strategy. The trouble a lot of people get in to is trading...

If margin is an issue than you are putting too big a position on or you need a larger account.

Selling strangles with additional fotm puts works too. If price tanks those puts (at least 2 to 1 of what you shorted) really kick in and help minimize loss and might even profit. Obviously this has to come off when you get close to expiration since the bottom falls out of your extra longs but...

Yes they are the same but they have very different results. Moving too fast in one direction might not be an issue with a credit spread, with iron condors they will be. One is a directional trade the other is a non directional trade, completely different results. If you had read my message...

Learn how to pick direction and trade verticals. Either credit spreads or debit spreads. Learn how to find stocks that are in a quiet period with low IV and learn how to trade straddles. Not a premium collecting strategy but can help balance out your credit spreads. Everyone wants to...

Straddle if you can make a profit based on your assumption Sell credit spreads outside of the range Butterfly if breakevens encompass the range Thousands of things you could do

Another big mistake is that iron condor traders don't pay attention to the IV skew which is pretty important when you are selling OTM especially FOTM options. I trade condors from time to time and 767trader is right, it all boils down to correctly guessing something. Either volatility...