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If one were to accept the notion that the rally of the past several months has been primarily a function of liquidity, does anyone have any advice on where and how to best track money supply, fund flows, or other indicators of the level of liquidity in the system. TIA. HD

No, his "Options as a Stategic Investment" is very good and, in my opinion, required reading for anyone considering playing with options. Just remember, however, that those who can, do and those who can't, teach.

Vega said it all. Further, as has been said with reference to investment seminars, I challenge anyone to come forward who has actually made back the cost of their newsletter subscriptions from trading the advice contained therein. You'd be far better served learning as much as you can from the...

A correlary to vega's point is that, since they can only be assigned at expiration, European-style options are, in my opinion, more suitable to option selling.

sle, Actually, a long calendar spread is a vega positive position, while a short calendar is vega negative. But there are other ways to neutralize vega and just play theta. One way that comes to mind is to ratio and diagonalize both a call and a put calendar spread by selling more near term...

GA, I'm not sure I have anything relevant to add to the above since I've been progressively moving towards a "third way" (or at least trying to). By that I mean I've been attempting to de-emphasize directional or even long volatility strategies, and been focusing almost solely on selling...

I'd have to agree with Steve and GATrader. Unless you can find a single person who's actually made back the $3,000 or so cost of their seminars trading, you'd be much better served reading McMillan, Natenberg et al. on your own and figuring out which strategy or strategies would best fit your...

I'm also very much looking forward to these, particularly the new VIX options. Structuring positions to isolate the vega on the VIX should be an interesting exercise to say the least.

Dojibear, I'm not familiar with Hoadley. I use OptionVue, which is a pretty robust program. However, unless you're doing a fair amount of options trading, I wouldn't recommend it as it's rather pricey. Also, I trade options primarily through Thinkorswim, which has a nice platform that gives...

Vega, It's actually slightly less since theta decay is non-linear and accelerates as the options approach expiry. But I think a more important point raised by your post is the advisability of pulling up a risk graph with all the greeks set out for any contemplated position before getting into...

Dojibear, First of all, it's incorrect to say that the bull call spread has a "zero theta". It has a NEGATIVE theta. Second, if you want positive theta and you believe 20 represents pretty firm resistance, then I'd suggest you consider selling a Sep 20/22.5 bear call spread. The other trade...

Dojibear, Excellent treatise on the fundamentals of options and myriad options strategies. Much better, in my opinion, than his "McMillan on Options". The latest edition also has expanded coverage of volatility trading. But to get a much more comprehensive overview of volatility based...

Adam, I agree wholeheartedly with ktm. If you've done enough research such that you're confident in the theoretical viability of the strategy, then I too suggest you try it out in the real world. ktm's point about the compability of a trading strategy and one's own idiosynchratic trading...

Nitro, A couple points. What makes this an ITM bear call spread is that you'd be selling a call that's in the money (in this case, deeply so). An OTM bear call spread would be comprised of a short and long call that are both out of the money (i.e short Sep 22.5 c/long Sep 25 c). Also, I...

Adamsoptions, The SMH has pretty good volume too. There's an ETF section at www.nasdaq.com which ranks them by volume and lists the components of each ETF and their respective weights within the applicable ETF. Regards, HD

Nitro, If you've identified a resistance level, why not write an out of the money bear call spread with the short option at or just above that level? Then you won't be nearly as delta short and can profit under any of three scenarios (no movement in the underlying, a drop in the underlying...

Chris, The main reason I prefer iron condors to long butterflies is simply that I get a much wider profit range with the former. Hence, with my IC's, the underlying can move quite a distance in either direction before the trade is at risk and thus I have a lot more margin for error. With a...

Chris, When setting the short strikes for my iron condors, I use a combination of standard deviation analysis plus, like you, an assessment of support-ressistance levels. I'm always sure to set my short strikes outside of the applicable S/R range. Hence, if the underlying violates either of...

Elite, Very occassionally I will write OTM naked puts on individual names that have experienced a volatility spike and where I wouldn't mind owning the stock at the written strike less the premium. I recently did so on MO and JNJ at modest profits. One rationale for writing naked options on...

Nitro, Yes, that's the only difference. The XEO contracts will trade at a slight discount to the OEX to compensate for this. However, when selling premium, even when hedged as I always do, there's a comfort level in not having to worry about early exercise/assignment. Hence, in my opinion...