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Regarding your example of the short calendar around earnings report: I guess the earnings should be in the back month (since you are selling the higher premium which has been priced in) and buying the cheaper front month. If it were the other way (ie. earnings in the front month) you would...

I know there is no way of determining it until after the fact. However, if your model happens to price IV better than the competition (ie. your volatility forecast is more accurate and nearer to the realised volatility), wouldn't you gain an edge over other participants?

how about finding mispricings / discrepancies in IV? It makes sense that different valuation methods and tools would result in different perceptions regarding the extrinsic value of certain options.

yes, i've started to recognise my previous errors as well. Basically offering volatility cheaper than what the market was demanding for it.

Ok thanks for this helpful post. I find it funny how the vol smile on USO is rare: you would think that the ATMs should always trade at lower IV's than the OTMs. Basically you are telling me that this situation is reversed nowdays, and that selling ATMs and buying OTMs is the right way to get...

I havent studied the UNG option chain. On the other hand a strangle on USO seems like a good play, since I get to participate both in the move up as well as a possible correction. Shall look at different setups. Thanks for your time.

Could you please elaborate on how to find cheaper premium? Are you talking about monitoring the bid-ask prices and getting filled in at favourable quotes? Or simply choosing different strikes altogether? Thanks.

Given the parabolic moves in oil, i find it risky to go long the underlying at these levels. I was thinking it would be wiser to put on a vertical spread on USO. ie. sell the 110 august puts @ 5.70 & buy the 100 august puts @ 2.44. But I still don't like the risk / reward ratio on the...

me too. good speech i must say.

I think the point to take home is that the 10% return is ON AVERAGE. You might have some better years and some worse years. Are you telling me that all the 1000 trades in a year, for the next ten years, are going to perform well? Surely not, and therefore a 10% average annual return is a...

If i'm not mistaken, their traded OTC - ie. mostly unregulated, and financial institutions opt to keep it that way :D

I always hear this tremendous risk with naked puts and covered call strategies but lets assume one is investing long term: wouldn't covered calls reduce the average cost per share? Isn't it a method to generate income from stocks you are willing to hold in your portfolio? Regarding naked...

ROFLMAO

are the nummerical tests very tough? does one need to prepare? I might be attending the next recruiting event in july.

what this topic has got to do with trading psychology i have yet to discover. don't worry C-kid, government must be devising another false flag to justify the invasion of iran.

Not to discredit any of your trading or chart reading skills but, funny how everything seems so much easier in hindsight.

damn... nobody? :confused:

jem, looking forward to your conclusions. I guess its something related to how the human mind prefers a stream of tiny winners and just a few big losers. The more times you are right (however tiny your profit may be) you will feel better with yourself than if you had a string of tiny...

bump please