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It's amazing to me the depth of the "the dirty little secret" i.e. the mutual fund industry is really the world's largest skimming operation.

No big deal. If you wanna short based on THAT go right ahead.

If you have to ask, I strongly suggest paper trading options first. Yes you can sell options naked. How much cash do you need? I can vary. Initially you would need 25% of the underlying. After you sell the call you still need 25% of the underlying AND whatever the market price of the...

Talk about taking the wind out of the DNC!

Gamma scalping is a little different, and is when you think volty is low. Buy a straddle and as the spot moves - you have to trade the underlying to remain delta neutral. The bonus is you buy at the low and sell at the high in your hedges, as a direct result of staying delta neutral.

How uninspired does the Biden pick look? I am watching her speak right now, and I have to say it's the first time in a LONG time I actually feel like listening to a politician. She's a home run IMO. There's a naturalness there absolutely non-existent with Hillary.

To me, the skew is no different than the line on Utah v. Michigan this Saturday, to open the UM seaon. Or pick any other game. The line is not the true odds of winning, it's the estimate of equlibrium for the moneyflows.

Yes, covered calls in of themselves can't be leveraged but the margin requirement for a CC can be quite small. For instance, years and years ago when I was with TD waterhouse, the margin requirement would be 25% of the underlying with the call's OTM portion being available for that 25%. In the...

You almost nailed what I am doing on the SPY. There are a few of twists though (how close to delta neutral, how close to premium neutral, etc). The main addition though is there are 2 months involved - Short the middle in the front month, and Long the wings in the back month.

Personally, I HATE covered calls. I just prefer short puts as opposed to CC's, but that's me. One simple sale. It seems the covered call strategy is for people just dipping their toe in the options water. Also, it is no harder to hedge a short put.

Here's a few successories: http://www.despair.com/indem.html

If the XLF goes to 10 in 1 day then the answer i yes. Otherwise it's 2x the daily percentage move. A stock can lose 4% day for eternity.

Best version of a strawman I've seen in a while. Textbook-worthy.

I meant to say "but now is at a 100 contract clip per $1mm, which still indicates some leverage" $200 would have been Niedderhoffer-esque!

It's certainly more than miniscule if you are not leveraged (cash deposit to fully cover a possible assignment). There's about 2% premium for the next 4 weeks until the Sept expiry for SPY options, which is not out of the average range for the long term.

I don't know exactly what they were doing, so it's really speculation on my part. My guess is they were rolling the puts over every month, but not increasing the total equiv SPY deltas from the previous month. They may have maintained a constant 2% OTM strike. Looking back on some others...

You don't HAVE to be highly leveraged with options. And rolling over to the next month has nothing to do with Martingale. It is a consecutive capture of ~3% of the stock price every month REGARDLESS of where it is trading. There is no double-down. And the problem with BUYING options is...

I think your point is that it is less risky to sell consecutive monthly puts just OTM, provided you are not using any margin, and cash can back up your assignment if needed. I actually cannot think of a more conservative option play over the long run. I have to stress though the trade must be...

Buying options is as risky as selling options. Slightly different rr profile though. The aggregate is same - how could it not be? Q, what is a more risky bullish strategy? 1. Selling naked puts - as many as you can but without tapping into any margin 2. Buying calls - as many as you...

LOL. Really! It's funny because there's a ring of truth to it (as is the best humour)