Search results

I still don't see why you don't just sell the same strike deep otm put credit vertical - exact same risk profile but fewer commissions (assuming underlying moves in favor and spread expires worthless) and more liquidity. daddy's boy

Thanks for that timbo :p. He appears to be talking about ctm backspreads but then he also makes a general statement: "Anytime you are short options you should always scalp them" Can you see the source of my question now :) ? However, I think I have the answer, but it's alsways nice to see it...

Hi Mav Are you talking about vertical credit spreads or ratio backspreads to gamma scalp? daddy's boy

Not only will this not work as profitaker already pointed out, but your long stock (if it hadn't been called away) might drop further than the amount of the dividend, resulting in more loss (see discussions on covered calls aka synthetic naked puts). daddy's boy

You can still gamma scalp, but use options instead of stock to balance your delta. daddy's boy

Thanks for the reply Tower. That's an impressive statistic. Please correct me if I'm wrong but you seem to be saying that the traders you know/train generally become profitable within the first month or two of starting their trading, the exception being this chap with a current 5% acct risk...

Ok, I've got an insight I acquired today that someone might want to disagree with, although I think that would be difficult. I hold the belief (since today) that a collar or a married put has the advantage over the equivalent synthetic call/vertical (bull call spread) in only one significant...

Lol, I think all the smart asses have gone home for the day. Cheers daddy's boy

That's interesting. So how much would you risk if you have no profits or a loss for the year? daddy's boy

I think that's a great point to bring up. I think Cottle also makes the same comment in his book. daddy's boy

Thanks for the feedback Bob. I think I finally see what you're doing, correct me if I'm wrong. You are basically balancing deltas (or should I call it gamma scalping?) and it just so happens that making a fly serves that purpose or, put differently, a fly is the result of the delta balancing...

Bob, I have to agree with rallymode and majorursa, but that doesn't mean I don't find your postings useful. You obviously like butterflies and have become comfortable and proficient in trading them - perhaps they fit your personality? Others here are comfortable with, say, ratio backspreads. My...

Got it thanks. You are actually looking at 2 separate trades, as you've stated - one has nothing to do with the other. One is a married call and the other a legged fly. They have nothing in common except the underlying. I must be missing something again - how is this an example of how you...

Very interesting. You get a sort of ratioed (8:20:10 + 10 long july 100 calls) 95/110/120 july call fly? But when plotted this 'thing' looks like a simple long call. Did I misunderstand this somewhere along the way? daddy's boy

Very interesting. You end up with an unbalanced strangle (10 long july 120 calls vs 8 long july 95 puts). Are you playing a delta neutral strategy? If not, then why not consider rolling the long calls down instead, to lock in some profit and keeping the married call intact? daddy's boy

Time. Just remember: you can always make more money but you can't make more time :). daddy's boy

The book is not about 'arb opportunity' and only costs around US$91. I assume you're an active trader, if so then $91 should be a fairly small sum compared to the amount you've lost on various option plays (unless you have a 100% success rate, lol). My opinion is that it is worthwhile purchasing...

I'm no expert on synthetics, lol. I only picked those strikes because I wanted to give an easy to follow example of otm strikes for those putting on a reverse collar. You might have just done the married call - short aapl and long the otm 85 call - which would be synthetically a long 85 put...

Easy. You're short aapl stock (trading at 79 say), long the 85 call and short the 75 put - i.e. both are otm. This is the same as being long the 75/85 put vertical debit spread. I think this is what you were asking? daddy's boy

Not semantics but definitions. The real trade is the trade you place, in this case a reverse collar. The synthetic is the trade that is equivalent to the real trade, in this case the vertical. Otoh, if the real trade is a vertical,eg bear put spread, then the synthetic equivalent would be the...