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I was thinking... Front month pre-earnings IV is usually high and will likely drop post earnings. So wouldn't it make sense to buy back month straddles? I'm sure the spreads are wider but I'm guessing they won't suffer same change in IV.

thank you Masteratwork, this is very helpful!

what is a risk neutral distribution? what do you define as the "real" distribution? I'm genuinely curious since I want to understand what you've posted. thanks!

ahah thanks for putting a positive spin on this... spin! without theta and vega... I'd be toast lol

So far, I prefer to be short theta through either the fly's or verticals. I don't like short verticals by themselves though... I like to setup long ATM verticals or slightly ITM. I tend to have an uncanny ability to pick stocks that go nowhere :p

this was an excellent book! though should you decide to purchase it, go to nuclearphynance forums for the errata. It's under the books section.

I have to say, I have two of Saliba's books, and I don't find them useful at all. Options workbook 3rd Ed and Option Strategies for Directionless Markets I think reading the other books mentioned covers in greater detail what they attempt to teach you. I feel like these books are for...

yes... sleeping around is gambling.... never know what you're going to get!

maybe I'm just young, so I don't know how the real world works... but why #1? I trust my closest friends... and I can't see us screwing anyone over I bet it happens, but how often? I don't want to steer this off topic, but really?

thanks again spin... this is really helpful, and I think if I tried to look for all this stuff in books or videos it would have taken me a long time. So this is awesome I appreciate it. I'm gonna save this and go through it, make sense of it, "simulate it" and see what you mean exactly!

I think people have this idea of what trading is, and they stick to it. It actually doesn't matter what it is... same can go for weight loss... tell people what they should do and what works, but they'll do whatever idea they have in their head. Also, you value your system since there...

wow, awesome spin, thank you. I'm trying to think of ways to make money on earnings, but I haven't figured it out yet. Anyways, I'll look into these, really appreciate it.

So I'm trying to think of ways to profit from declining IV pre earnings. If I'm short a straddle, then the problem is IV will drop, but the underlying will move. Short Calendars solve the problem, but I'm long the front month, which is (-vega), so I may not get the profit I'm forecasting...

Sorry, when I said "higher relative IV" i meant If the IV is somewhere between 25%-30%, and now it's 40% (this is higher relative IV) vs a stock with a high IV that's always 60% I guess it doesn't matter. Does that still give you upside potential? With the less call, is this just a...

Never thought of it that way... Do you mean higher relative IV? Or when IV is inflated due to news announcement?

slingshot hedge? (from Charles Cottle) Long stock, short 2 call verticals, use those to finance long put (basically a butterfly with an extra OTM call) market moves down, protected by long put market sits still, profit from decay of short call verticals market moves up moderately...

I'm gonna say +1 on thinkorswim plugging values into a formula is one thing charting and playing with the sensitivities is another.

I think Natenberg's book did a good job of explaning the model in practical terms, and without the use of too much math. But I think you'll need statistical background to grasp it.

you seem like you're being genuine, which is cool but i think your strategy is being interpreted as "unrealistic" in a sense that it is a "get rich quick" strategy, and thus is not being taken seriously hence the types of replies you're seeing. I think in reality, to "bang" out these...

I'm more confused reading through that. Edit: lol above spins' post, this was written before I saw his reply I think a graph will illustrate it. http://www.financial-guide.ch/ica/derivatives/focus_on_options/fundamentals/weba1.html http://www.investopedia.com/university/options/ I...