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Can you honestly say that you spotted #1-3 at the actual time of them happening? To me that would be almost to good to be true. If you did can you explain further how you did that? An how did you avoid all the other signals of similar kind that day?

Your question has no easy answer, any financial market of decent size has many and diverse agents operating in them. For listed US stock options I would say these are some of the important people taking outright vol positions, i.e. they don't just buy vol in one stock and sell it in another...

http://www.interactivebrokers.com/en/trading/marginRequirements/marginRequirementsUs.php?ib_entity=llc

Eurodollar bible: http://www.amazon.com/gp/product/0071418555/103-3537098-8303842?v=glance&n=283155&n=507846&s=books&v=glance

I would think that what you have seen is that good traders take stops when down 2-3% in a particular position. that is different then using only 2-3% of your capital.

I would be very surprised if any system could be profitable _without_ a general market component. A very significant part of a stocks movement is just explained by the overall market. It take a very strong stock to go up in a down market.

it does include ECN fees: http://www.interactivebrokers.com/en/accounts/fees/commission.php?ib_entity=llc

Well I was merely using the concept of a business card as proxy for the idea of a real career in a business.

Prop (Proprietary) Trading usually refers to market activities with the firms (Brokerage Firm, Investment Bank, Bank or Trading Firm) own money that aims to make money but does not support other activities of the firm such as market making and VWAP activities, or relies on mathematical or...

IB's rates at $0.005 per share is awesome for smaller traders (less then 1 million shares a month) and hard to beat. Many fund pros pay a lot more then that. Getting down to say $0.003 takes about 10 million shares per month. You can come lower but then you have to be among the really big...

"The pricing is essentially dictated by the volatility market as well as that of the underlying" What is the volatility market?

$0.07 per share average commission is too high. You can do better then that. http://www.interactivebrokers.com/en/accounts/fees/commission.php?ib_entity=llc

"how on earth will a market maker hedge a position? There are related products, but I agree that it would be hard for "delta-neutral" market maker to operate in this product. But I don't think there has to be a market maker at all.

"Selling volatility is short vol+gamma." I would disagree with that. If you want to be short vol and only vol you can hedge gamma. One way to do it is to sell longer dated options and buy short dated ones. Gamma is just another risk, granted a second order one, that can be hedged.

If you buy or sell an option you will have several different risks: Vega (exposure to chages in volatility), Rho (exposure to changes in interest rates), delta (exposure to changes in stock/underlying price), theta (exposure to changes in time). If your aim is to have a short Vega position...

and yes there are market makers on Globex that are also market makers in cash, for sure

On a market like the Globex there are many different players and to make a complete model that incorporates them all would be very complicated. Some examples of players on Globex would be: 1. Banks that make markets in cash 2. Speculators (I would guess this is your kind) 3. People who make...

Lets make a simple model: you trade against a market maker who makes two sided markets against the "cash" market based on one end user customer of the market makers bank (this could be say a big industrial company like say GM) The prices they quote to you is based on the order flow they /know...