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I'm curious then about your Oct 610 put entry. You first mentioned it on Aug 31 (unless I missed it earlier.) The past few days would seem to be a good entry for short calls, but not necessarily for puts. OTOH, you sold them for 2ish and they are now down to 1ish, which would indicate that...

Don't forget that stdev is partly based on historical volatility which has been very low. This compresses what you see as +1 and -1 sigma. If/when the market activity picks up in Sept, what looked like a good 1 sigma bet in August may change quickly. This may be particularly problematic...

Hi domestic, You are a brave man to discuss unhedged option shorts. Its only a matter of time before somebody summons He Who Must Not Be Named, the Dread Lord VN! Mwahahahahaaaa! :D Seriosuly though... What do you use to time your entries? One of the advantages of naked vs spread...

That's a whole different and nasty can of worms, isn't it :) The big question here is do you trust this guy enough to trade your money? Do you trust yourself enough to spot a good trader from a bad trader from a dishonest trader? Particularly since they all try to dress themselves up as...

What really struck me about John's post was this, " requires that you have your nose in the screen, be able to predict the direction very well, have a pretty good idea as to whether the move in the underlying that is affecting your spread will continue in that direction" I'm thinking, "well...

Check out the profit zone on this baby! :) It only costs you $425 to get in.

I think many of your posts are quite useful and informative. But others sometimes get a whiff of superiority about them. I'm sure some of my posts have a green cloud floating up :) The point is, we're here attempting to learn and improve our game. If you disagree with the current topic...

I see your point that a more complicated position isn't necessarily a better position. "Better" is in the eye of the beholder of course. I totally disagree that brokerages are the beneficiary of options overtrading. I am quite sure that if I spend $3 per contract to buy a calendar and...

I always think about the quote from one of the 20's era market "greats". JP Morgan perhaps? I don't recall. "I don't mind volatility. Its down that I don't like" :)

Edited and forgot to re-attach...

I think a long calendar might be a better tentpole. Like the fly, it is still a defined risk and defined margin. It has a wider b/e and just like the diagonal's it is being paired with, it benefits from rising volatility. You can do a CTM call or put diagonal as a tentpole, but the loss from...

For SPAN margin, yes. SPAN is portfolio risk based. When you add the backmonth longs, your portfolio risk changes and span adjusts accordingly. Also, a little followup on my earlier post on ToS. My demo period with them ended and I sent back an email explaining why I wasn't going to setup...

It depends on the kind of position, how far OTM, etc. Also a factor is how many other trades you have on with the same underlying. If I have a bunch of ES trades in place, I sometimes have to switch to ER2 to make the next trade I want. For instance, a 10 point vertical credit spread on ES...

I currently have some ES SEP1230P/OCT1200P diagonals in place from a few days ago. Margin required to add contracts is about $700 per contract, on a 30 point spread with a max risk of 30*$50=$1500. For comparison, what if I were to buy the SEP1290P/OCT1260P. The SEP short is basically at...

I'd be happy to tell you if I knew the answer :) SPAN margin looks at your whole portfolio, so unless you only have 1 trade on, its hard to tell what the margin is for any individual trade. You can also check your margin before and then after a trade. But that still may not be a good...

The trades were ES options, which ToS doesn't offer. I trade them through IB. I would move to ToS in a heartbeat if they had globex futures options and SPAN margin. Instead, I am going to either rollover a small retirement account to ToS, or just stick $3500 in a cash account with them so I...

AUG ES options are still trading today. With that in mind, here were my two diagonal trades for the month. This is for illustrative purposes only. I do not claim any expertise with this strategy. My normal trades are about as subtle as a rhino horn up the backside :) 7/25 ES 1277 VIX...

On a board that discusses FOTM vertical spreads, I don't think a high risk/reward, high probability and small credit is exactly taboo. I don't know anything about Summa's current trades, but what you described doesn't scare me off. I would be cautious about someone who makes their money off of...

He was dumbing it down for my benefit :) I understand that a volty jump will benefit the long backmonth more than it hurts the short frontmonth. But if the market opens up 30 points below your long, you are still facing a loss of almost the full width of your diagonal spread. Certainly the...

I find it curious that you would say this. One of the big knocks on vertical credit spreads is their exposure to negative shock events. A black swan loss that wipes out many small wins (and your whole account if overleveraged). Doesn't a diagonal have the same exposure?