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Probably a stupid question based on above but if the bookies know the game then why is it when they leave the floor they still make trades based off of volatility plays?

Can anyone tell me a good site that provides correlation studies for futures? I am not looking for sites with data geared towards trading spreads, just basic ones that give me an idea if taking trades in a couple of markets are correlated or not. Thanks!

If you are really sure the market has found a bottom and will be coming up (which I am not too sure of) then why not buy a call spread and finance the cost of theta with a short call spread in VIX. Obviously if you are wrong it would be a double whammy but a slow leak down wouldn't hurt the...

Along the same lines as the original post, I found this book to be a pretty sound strategy if you are looking to sell premium and reduce risk: Put Options : How to Use This Powerful Financial Tool for Profit & Protection It was written by Jeff Cohen and it has been a while since I read it...

Sorry, I missed the sarcasm the first time I read this thread through. Describing a naked option selling strategy with the defense being covering at a loss as a conservative strategy is obviously a joke.

If you are only trading a bear trend then why would you trade something that is nondirectional vs. a directional trade? With a three month trade, you don't lose as much theta but you do give up gamma. Trading before earnings can be a good trade, the trick is to find the straddles that aren't...

Besides your in depth research regarding the market not trending, what edge do you have selling what a lot of professional traders are buying? You mention that all markets don't go down at the same time, which I agree with. However, what happens when one of the markets you are short goes down...

The problem with selling options this low is that the last .05 takes forever to come out. I have more success selling 60 days out and taking the first 50% of the decay vs. selling closer in and taking the last 50% of the decay. Gamma is lower farther out too. With a PM account, make sure...

Is the $20 net commissions? Also, did you adjust the price to a realistic fill? TOS papermoney puts on a trade without any slippage so make sure you factor that in. A backspread is different from a straddle and is less short theta (the option sold helps to pay for the two long options). It...

Backspreads are great trades on vehicles that have had a big up day or a long run up. Volatility has come out and there isn't as much fear being priced in to those otm options you are buying so you can get them on at a lot better price. As eudaemon mentioned, play with the short to long ratios...

Hypothesis 1: vol will already have the announcement priced in Taking a look at how IV reacted around earnings both before and after might give you some ideas.

Spend some time on the CBOE site. They have a bunch of free webcasts: http://oiwebcasts.cboe.com/portal/v_s_g.asp If that link doesn't work, go to the education section and type straddles in the search

Theta is time decay, it is one of the biggest enemies of a straddle. You lose a little every day when it doesn't move. Vega in a straddle will generally help you if SPY goes down and hurt you if SPY goes up.

GOOG volatility shot up yesterday afternoon when the stock dumped fast after 1pm. The increase in vol inflated your option prices. With a move like that the best thing to do is take the profits. Pull up an intrady chart of each option in the straddle in thinkorswim and you will see the price...

Options are deceptive, you throw up a risk graph of a straddle then look at a chart and see that the stock can easily move past the break evens and with a little luck you could have a big pay day. My story involved searching for that elusive theta positive trade that would turn the option...

As volatility increases the bid ask spread widens, also as the weekend approaches they widen too. To answer your question if you bought at .70 you would immediately be down and have to wait on a move up in shld to get to breakeven. Looking at a time and sales log will give you a more accurate...

They are trading the verticals or individual options. Remember, most butterfly pricing is an aggregation of the mid prices or so of all the individual components thus they can have a negative number which means you could buy as a credit which is impossible because it would be a guaranteed...

Typically you will find you can execute the trade at the mid point of the bid/ask price maybe better/worse based on which vehicle you are trading. If you have Thinkorswim you can right click on the trade and show market depth. If you see the butterfly isn't trading with a lot of volume, you...

I am sure others have already said this but just to repeat, TOS paper executes trades at fills you will never get in real life. It may not seem like a lot but if you want to keep track, you need to add in the slippage or you will be hurting when it is real money. Best bet is to take the...

Either buy/ sell stock to get delta neutral or sell 1/2 the straddle and keep the other 1/2