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I am happy to report that IB has made the decision to reimburse me for the loss I incurred due to the incorrect statement they published. This decision was made today shortly after I made it known to IB that my patience was running thin on waiting for their response. Please understand that my...

I was thinking along similar lines with barriers...

(opening the can of worms) Wasn't there a million post thread about whether equity markets were zero-sum?

I understand you are just trying to share information with others. I also understand that you believe synthetic calls are more profitable than natural calls. In the latter you are incorrect. Others have pointed out the relationship with puts and calls (put/call parity). Even at the same...

You're still long stock + long otm put which is a synthetic call. You can keep your directional (or non-directional) strategy as is and substitute the long stock and long put with a call and you have the same positions at a better price. Nothing new about diagonal backspreads except most...

It's still a synthetic call any way you look at it regardless of the deltas. You are doing call credit spreads and backspreads. Same risk and same reward. Except your buying the synthetic and paying more...

Gotcha, thanks.

Sorry Risk, I'm trying to follow along but I was confused by your risk-reward statement. How did this practitioner have a 1:1 risk-reward on a short synthetic straddle? What hedge was this person using? Thanks in advance...

I'm glad to hear they did the right thing in your experience. I'm just surprised to hear that it took so long. I thought a 6 weeks was more than patient. Here's the response they just sent me. ----This request has been escalated for review by senior management. At this time we have yet to...

Just updating everyone to the status of this issue. I still have not received a response from IB for the original $6300 loss incurred due to their incorrect daily statement. I sent this to them moments ago. I'm hoping to hear back from them soon... ----It has now been over a month and...

Options contracts for the March Quarterly cycle (Mar, Jun, Sep, Dec) will be settled in cash. Serial options for other months are settled with the closest ES contract. In your case the short OCT 1280 Call will make you short the ES @ 1280 (ES currently @ 1300) at expiration.

I agree buy to OTM calls but why use back-month? Back-month has a flatter gamma curvature and will accumulate less deltas on those calls. They're also more sensitive to vega as IV_Trader mentioned. If your positive on price movement (within a certain time period) then I would choose the...

Sorry, misquoted the barrier. Around 350 - 400 for the no touch at the short strikes.

You have it right. I've been buying SPX strangles (25 pts OTM). My idea behind the no-touch was to partially offset any theta loss due to lack of realised volatility. I've been getting quotes of around 200USD for a 2000USD payout on 3 week no-touch barriers (at my strangle strikes). When...

kny3 is correct. The more time there is the flatter the gamma curvature. If you're using verticals to strictly accumulate deltas I'd stick with the front month and work on hedging your theta. I've been experimenting with using no-touch barrier hedges on long strangles. I then convert to...

ICs require an aggressive adjustment strategy. Be prepared to close or hedge the position quickly if the underlying or vols move. Expect around a 1.50 credit for 10 point SPX spread around 3 sigmas OTM (assuming current implieds). Selling cheap gamma is like not wearing you're seat belt...

I see. A losing position in normal trending markets. Even so, I thought the characteristics of the position interesting without a significant volatility effect. Perhaps I'll play around with this in the weeklys just to get a feel of a pure gamma play. Thanks again for your thoughts...

Sorry, perhaps I misunderstood your previous post. I was referring to long backspreads (short ATM, long OTM 2x3) done for a credit.

Riskarb, I've been dabbling with the idea of using backspreads on both sides (wrangle?) with a week till expiration. I was thinking there might be advantages with the high theta on the short options and the gamma curvature for the longs. Vol seems to be less of a factor being that close to...

I agree. Entering and managing trades without being aware of one's risks (greeks) seems a bit like gambling to me. I always lose money in Vegas. I guess to each their own...