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Through the first qrtr of 2009 I happened to play a similar strategy (with mild modifications) on SPY. I lost 28% of my portfolio. That could answer youe questions. :(

It's called Hot Flashes :D

If you believe so, then sell OTM put verticals.

Anyone has experience with them? Specifically- liquidity and quality of fills on combos. I buy flies all over the place (SPX) and contemplating diving into DAX as well. I'm talking 50-100 lots. Thnx

I am considering OptionsExpress. Still haven't made up my mind though. In the meantime, still trading with TOS, but not very happy anymore.

I second that :cool:

What options strategy would you use if you had an estimation that a certain issue is going to move atleast 5% (no direction bias) after EA? Of course, MMs have adjusted options price accordingly. Any ideas (I've tried several strategies, none works consistently). :(

It's always Bernanke :D

It would be nice to see how you actually trade this stuff.

http://news.yahoo.com/s/nm/20110108/us_nm/us_usa_shooting_congresswoman

http://888options.com/ choose: trading tools- pricing calculators

works for me...:cool:

Try calendar spread. Close on strike-touch.

Or in two words: gamma scalping :)

I tried converting pair trading into options a couple of years ago. I thought to overcome the greeks' influence by using DITM options, but then the wide B/A spread killed it.

OTM strangles bear the same P&L as ITM, just cheaper to buy, with better liquidity andbetter B/A spreads. ditto again. gamma scalping IS possible. e.g. IWM for RUT options (1:10 ratio)

b/a is bid/ask, and IB give (take, actually) 70 cents if you trade more than 1 contract at a time.

Both IC and calendars share the same directional risk. They are both short gamma and will get killed on a large move of the underlying. So balancing vega doesn't make this combination a protected portfolio. BTW, do you mind sharing the websites or identity of those two newsletters you mentioned...

Almost all options trades are spreads. What exactly are you aiming at? :confused:

I have a plan for you: What you used to buy- sell, when you used to sell- buy. :D