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How about DRW, CTC, and Wolverine? Those were all great "sheet monkey" sweatshops.

A good free site where you can track individual stock IV as well as historical vol is Market Chameleon: https://marketchameleon.com/Overview/BYND/IV/ I would stick with what you're good at, which is trading stocks it sounds like. Options can be a high maintenance headache with all the greeks...

Extra credit: 1. When you buy two adjacent butterflies, what do you get? 2. At what point on the IV curve does a long butterfly position go from being short premium to long premium? 3. If you add all the same width butterflies on the smile what do they equal?

"so if i have a butterfly a spike in IV will kill it to the downside" Depends how wide it its and how close the "guts" are to the ATM. The wider the fly and the closer the middle is to the ATM pt, the more IV risk (negative) you have.

You must have bought the strangle 192.5p/230c just before earnings. You got murdered on the implosion in implied volatility, and to a lesser extent the time decay. Volatility went from 125% pre-earnings to 75% post-earnings. Volatility dropped an insane 50%. You would have needed a much bigger...

Depends on many factors: overall IV, steepness of skew (difference in IVs between the 50d and 25d points), time to maturity, and the 2nd order greek characteristics of the 25d options - Vanna (delta change from change in vol) and charm (delta decay from passage of time). The best thing to do is...

If you bought a 10 yr junk bond and sold a 10 yr US Treasury Note against it to lock in the credit spread, you have just as much risk or maybe more as selling a naked put on the company, if the company (the junk bond issuer) goes out of business. Depends how far OTM the puts are. So yes. Buying...

Maybe that's what he meant to ask.

Credit Default Swaps are as risky as naked OTM put options....in many ways mirror images of each other. They are often spread against each other OTC. http://www.fmaconferences.org/HongKong/Papers/DOOM_CDS_Trading_v1.2.pdf

Interesting generalization you have concluded about who makes it and who doesn't in this business. You wouldn't happen to have any quantitative support of this notion? If so would love to read up on it.

I have to laugh because I have those same awful memories...hardly remember my really good trades, only the really bad ones. And I couldn't stand the other traders who would insist on trying to sell you more where you just bought them. But looking back I should have doing the same thing as them...

Wheezooo explained it perfectly, and it's a sinking feeling you would never want to experience. Initially you felt great if you were the first one on a "ticket" (first trader to get allocated a trade), but then you realize the broker has 10,000 more to sell to the crowd, and now your trade is an...

My guess is that the effect that covered call selling has on OTM call IVs would be nearly impossible to quantify. You would have to categorize every trade that takes place, requiring market participants to give an honest answer why a particular trade was executed...which would be ludicrous...

You can do all the research and analysis you want to try and figure out why a particular condition or phenomena exists, but to truly believe in it you have to experience it. Like Wheezooo points out, when the market is rallying and you see that all you can do is buy OTM calls and sell OTM puts...

I have not seen any quant research to back this up. It's simply one of the stylized facts of the industry. I forgot to mention that another factor driving the low IV of the calls is the popular synthetic collar strategy large institutions implement. This is where against their long equity...

Not aware of any service that monitors these opportunities. If you find something out there please share. i keep track of these combos on an intraday and historical basis for the products I trade. Something that scans the universe for these conditions would be really valuable.

"One more question re: long term maturities. Assuming the stock returns follow a more normal distribution, what would the IV curve look like in that situation? Just a smile?" You would think that would be the case, but in all likelihood, the IBM IV curve would still have been negatively skewed...

Need to point out something important to you. When you look at the IV skew of the strikes, the shortest months almost always look steeper and more negatively skewed, which often times is the case. But when you compare the IVs of the deltas or standard deviation points across all months on the...

For the most part you got it. Not sure I agree with your statement of "Equities are more normally distributed, index options are less negatively skewed." Equities exhibit the same lognormal price distribution as Indexes do. And Index option curves are generally more negatively skewed than...

Adderall works amazing for trading and is a good substitute for cocaine. The problem, like any drug, is you become physically dependent on it and feel retarded when you're not on it. I would only use as needed...like during the "sky-is-falling" armageddon trading environment of 2007-2009.