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There's smart money, there's dumb money, then there is @TanukiTrade who thinks that "Put Skew ... indicates the market is anticipating a downward movement" :banghead::banghead::banghead:

You seem to have drunk the TastyTrade Kool-Aid ... and yes ... the TastyTrade calculations of Expected Move are Mathematical Diarreah ... Happy to be proved wrong if you can answer these 2 questions: 1. Why, for a Stock with same Spot/Vol, but different strike widths (say 99-100-101 v...

Except none of your methods are mathematically coherent or consistent with any realised/implied volatility, particularly as you seem to extrapolate the Expected Move analysis over a 6 month+ foward window ... which just increases the error factor Why not use an Expeced Range that is "implied"...

cc v csp equivalence is dependant on earning the risk-free-rate on the "cash" used to secure the put ...

If you want to get a better understanding of Option Implied Probability Distributions, it is worth digging through some of the following Natenberg: Morgan Stanley: Mean Absolute Deviation v Standard Deviation: Option Implied Probabilities...

:D :D :D

Reminds me of Groucho Marx !

#2 Binary Expected Move Next on the chopping board of brain-dead ways to calculate "Expected Move" is the Binary Expected Move inspired by the option-goons at TastyTrade You say the calculation of is Multiply the price of the ATM straddle by 0.6. Multiply the price of the first OTM strangle...

Let's work through your various "Expected Move" Calculations and see if they are of any real practical use #1 Standard Expected Move You say, the 1 Standard Deviation Move (1STD) = Spot x impliedVol x Sqrt(Days/365) For the example I used this would result in 1 STD = 100 x 100% x...

Here's the challenge to illustrate whether any of the 4 methods you have chosen are useful ... Calculate the 1,2 and 3 Standard Deviation moves for a stock with Spot Price = 100 ImplVol = 100% TimeToExp = 365 Days 100 ATM Straddle = 76.60 95/105 OTM Strangle = 71.70 90/110 OTM Strangle = 66.95

Mathematical Diarhea !! ************************************ BEM Calculation (the TastyTrade Method) The Binary Expected Move is calculated using a weighted sum of the ATM straddle price and the prices of the first and second Out-Of-The-Money (OTM) strangles. Multiply the price of the ATM...

Complete and utter TastyTrade bullshit !

KrisA is a former SIG trader who shares plenty of trdaing insights and currently building tools for retail option traders @KrisAbdelmessih https://moontower.substack.com/ https://www.moontower.ai/ https://blog.moontower.ai/

Seems as an odd structure (DITM +Call / ATM +Put / OTM -Call) when you could just Buy ATM/OTM Call Spread + earn int on balance investment Unless some form of tax arb ?

Exactly, because Sosnoff is obsessed with rolling losing trades until he can get out at breakeven, rather than focus on best use of capital !

Rolling simply to avoid assignment is exactly the reason why you shouldn't, unless you have determined that the new position is the one that you want based on best guess of Spot-Vols-Time and not just the position you will end up with default !

You would only "Roll" or "Adjust" any trade because the position you end up with is the position that you actually want on at current prices with respect to your best guess of market direction-range, volatility and time Better to start with "What position do I want" Then execute...

100% agree, but it's the way retail punters, particularly the TastyTrade variety think, that they will keep rolling losing positions until they get back to breakeven to soothe the ego and need to be right ... Sosnoff is willing to roll for years just to get back to breakeven ... which inevitably...

FTSE has had at least 2 daily rises of 8-9% whilst I have been trading, 2008 & 2020

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