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TOS is showing at 2% down your margin would be at 80k and change. It is looking at the new 10% down from there to calculate the loss. 4% down is 101k and so forth.

TOS is showing mar expiration 1700 put x10 as 62k margin 10%down 6% up

Just think of the books she could sell. How a mom at home made 110million in her spare time.

Actually you will have to dumb it down to get to my level. What I was saying is that if you are literally selling junk at .10 in hopes of collecting theta there will always be a cost to buy it back unless you wait for expiration. It is why the decay of an option (again in my observation), is...

Another thing, going for a dime seems too small. You might want to up the premium you collect by getting closer and being prepared to close or hedge. It takes a lot longer for an option to go from .10 to .05 than from 1.00 to .50. Which means you are going to have to let that .10 expire to...

In listening to her, she doesn't hedge but she does buy back her shorts when the delta gets to 30 and rolls down. She stopped using longs to offset her risk in 2008 right before she upped her size.

The last six months are not a good indicator of what to expect. If you are basing your expected losses off 2sd moves on individual stocks then you might be in for a shock when one of your underlyings really get hit . Remember on the downside you have to not only model the delta hit but the...

It isn't the average volatility that I worry about, it is the extremes along the way. I heard her compare what she does to sitting at a blackjack table with odds 95% in your favor. The problem I have with that comparison is that all outcomes are known in blackjack. Add in the chance that the...

That is what the interesting thing is in listening to her earlier interviews. In one of them she made a comment that there were times when she was looking at the price of tickets to south america due to the drawdown she was facing. Also, I picked up that she was trading condors (not the naked...

Where on the option curve is this IV %ile being calculated? ATM? average of multiple strikes? Seems to me you would want to know the slope of the skew curve before you start selling strangles/iron condors just because of a high IV.

If taxation isn't an issue or you aren't sure how long you want to hold the stock, why not sell out the stock and buy a call? Synthetically equal to long stock plus a put and there are a lot of different ways to structure it based on your outlook (otm, itm, front month, back month, debit...

By rolling you are taking a loss on your current trade and then putting on a new one. The question is, would you put on the new trade if you had never put on the first straddle?

I wasn't comparing an earnings move to a flash crash. I was giving an example of how quickly a naked option can inflate in price, especially on the down side where both the move and the volatility hit you at the same time. The specific move wasn't the point. Having a long option for...

We agree that there is no one strategy that can be put on blindly. However, whether it is puts or calls adding a long option somewhere to protect your trade is the best thing you can do if you want to be successful over the long haul. Replace the AAPL naked call with a PCLN naked put a few...

QQQ Oct. 68 put can be sold for 1.76 the 68/65 bull put spread can be sold for .89 which is over half the value of going naked. After AAPL dropped from earnings if you sold a 570 naked call and I sold 10 570-575 bear call spreads who do you think would be better off today?

Am I missing something here? Why would someone allocate 100% of their capital to credit spreads? If you are trying to compare it to a naked position wouldn't you look at how many credit spreads you need to equal the naked short? If his short gets exercised he would get a margin call and they...

The fact that they are not the same is the point we are trying to make. It does not track the crude oil futures as it should.

As I said, long term (not short term) there seems to be some problems with USO. I realize this data is old but I can't think of why the info is not still valid. http://www.tradersnarrative.com/usos-valuation-drift-3066.html

USO has pretty decent liquidity but I have seen that it isn't the greatest in long term tracking of oil. If you are utilizing short term strategies you might be ok but I wouldn't recommend it long term. Forgot where I read about the problems it has but if you google "problems with USO" I think...

Outside of events that influence a sudden change in IV I find that trading around volatility assumptions are a lot easier than price direction. However, in the end like every other strategy you are still making assumptions and trading based off of that.