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I would just close it out and next time make a trade that does not involve the possibility of losing a large amount of money easily . Never liked credit spreads because the OTM parts decays so fast as to be useless. May as well just sell naked fewer contracts.

It depends on the increment of the underlying stock and the trading platform. The etf XLP for example shows everything down to the penny. others do not but the offers exist anyway.

some stock options quote in increments of 5 cents. others in 10. and other by the penny. why such a differences exists I have no idea. It makes no difference where you get filled though. If the ask shows 10 cents and the bid shows zero, you can get filled anywhere between depending on the...

how much leverage was he using? BRK is pretty big

I thought they were 100-year options. The counterparty is a fool, that's for sure. Even Taleb in the AMA says he sells ATM options.

The duration is 60-80 days. There is a post here showing the backtest using TOS thinkback . It did well in august 2015 but badly every other time of the year. http://greyenlightenment.com/does-tail-hedging-work-it-depends OTM SPX puts decay insanely fast due to very high skew . SPX OTM...

It all depends how you set up the trade. There are many ways of selling premium where you cannot blow up

But the skew on SPX is pretty steep, so there is a lot of fear priced into the OTM option market even though ATM is low. A high skew makes selling more profitable. Big blow-outs are rare if you do it correctly (hint: very long dated is almost always better). Selling 30-50 day option like the...

there are two versions of his strategy: put $ in short-duration bonds and put 1-2% in OTM puts. The second is to put $ in SPX and the 1-2% in OTM puts. The former IMHO is better if the yield is enough to offset the decay, which it almost never is.

He shut down his fund in 2001. Mark Spitz does the trading. Taleb is an adviser and pitchman. The OTM tail hedge strategy does not work well anyway, which is why he is constantly trying to raise money and promote the strategy (why would someone promote something so aggressively if it were good...

easy $ due to low IVs and high realized volatility. Perfect environment for option buyers. SPX puts are waaaaaay expensive but realized volatility of SPX is always very low.

taleb: makes more money selling books than trading

what a horrible strategy sold to high net worth suckers even worse when you include the 2% annual fee .

http://www.cmegroup.com/trading/interest-rates/us-treasury/2-year-us-treasury-note.html the yield between the first and second contract is $600? that seems too much . That means $2400/year

options are priced with much more complicated formulas that take into account 'black swans'. That's why the IV on the put-side is so fat. The option market is still efficient despite black swans. Taleb and others are wrong.

selling 120+ day ATM stangles on ES SPX or SPY is good ...there is a research paper that says OTM puts and ATM stranges are the best strategy but don't use more than 3-2 leverage

selling the 120+ day strange is the best way to make $. It requires very little analysis or predictions . roll and cover after a month, repeat

he didn't blow up. the naked strange 200+ days to expiration can handle very big market correction because the premium is so huge. maxing out your account on iron condors is how people blow up

just keep moving it until it's filled . shouldn't be more than 8 or so cents from midpoint

short