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Can anyone speak as to the non obvious pros and cons of creating a BD? I like for instance the occasional opportunity to extend my leverage beyond 6x without having to use a complicated option strategy. I also am considering taking a wealth management practice under my own name so to have that...

View it another way. Your friend is offering you the opportunity to buy his home at 20% over assessed value. All you have to do is pay him 1% extra on top of the extra 20% to secure that once in a lifetime deal. Now go bid him .25% premium instead of 1%, maybe he’ll accept it.

You’re not talking about trading options, you’re talking about buying lottery tickets. Don’t make statements you can’t back up. Either- 1, above, and just found out at robinhood last week in Tesla that volatility is a real thing 2, use it to hedge a position at which point you’re using them as...

That’s horrible advice

Might someone try to leverage skew when trading a synthetic opposed to natural?

19/Feb 25D have 9 % of skew am I reading that right?

Re: bid/offer I am quoting the combo in the middle, I could see borrow but dividends ? On an index?

For example: the 12/28 spx 3705 series combo is priced 2.45. Spot is 3703.06, parity would be 1.94. My reading of this is there being 51 cents of skew?

I’m just starting to get a knack for options and would like to start a thread discussing the valuation of options by pricing them against other options. One area that I am learning a little more about is valuing options using combos. I don’t want to say much more and taint the discussion...

You could say that though about anyone who traded products over the counter which then got heavily automated. My father was an equities block trader and ran the merger arb book for a fairly prominent firm which back in the 80’s to early 2000’s was a key source of 3rd market liquidity. Like all...

You write a lot about the interrelationships of options and using them to fairly price each other. What did you read and what do you look at in order to do that?

Tony Saliba is a big proponent of pricing options based on relationships as well and does believe in the usage of BS but as a guide not the Bible.

So did you sell the 20’s lol

Good lesson in position sizing

100% agree. Ambition, experience and humility are the key ingredient for success.

Props to @.sigma picking up the torch here. Much appreciated

Where was the stock when you traded the 40 wide fly? To put another way, where does the underlying need to be when you put a fly on?

they do in the minds of the successful. They should haunt you. Mine do.

I think they were 5 wide. I had no idea wtf I was doing. They were trading credit to zero believe.

In April I put a zero day fly out market order SPX got nothing done.