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If something becomes overbought/oversold (which is a relative and highly subjective term) and is ALSO accompanied by an IV increase (fear) you could fade the move (short overbought and go long oversold stocks/etfs) and sell premium at the same time to benefit from an eventual IV contraction on...

By the time something is front page all over the news it's probably too late to take advantage of any move (i.e. everything has already been "priced in"). If anything I would look at counter-moves here (fading the crowd)

It doesn't get closed automatically and in fact your pnl will reflect only a portion of the max loss, leaving the rest of it (if it does stay below your long put until expiration) to be slowly arrived at through time decay (your position will be negative theta). Although having an ITM short...

I think for a retail trader it is useful to know all this especially the relationships and interactions of the different greeks and actually to simply be aware that the greeks interact with each other and that there are some higher order greeks etc. I do however agree with you that an intuitive...

I am trying to wrap my head around your premise here. Are you saying that if the delta rises by a certain percentage (say from 0.50 to 0.60 it would be a 20%, which for a call implies the underlying moving higher) then the Vega would fall by the same percentage (for example from 0.10 to 0.08)...

Megane I know you feel confident because of your backtesting and maybe even paper trading, etc. but believe me, when push comes to shove and your positions are tested (and they will be, just probabilities playing out) it is much easier to manage a 1-2 contract position like Vegamedic said, just...

I don't see Open Interest as any reliable indicator on Price Direction. Open Interest only increases when a "Buy to Open" order is met with a "Sell to Open" order since when it's a "Buy to Open" matched up with a "Sell to Close" there is no new contracts being created but rather the contract(s)...

If you believe in the Efficient Market Hypotheses all those indicators and even fundamental information, while interesting for sure, do nothing for your actual trades' results. What does? Strategies, probabilities and an understanding of implied volatility

What I meant was that it's different from Taleb's other books like "Fooled by Randomness", "The Black Swan", which are not technical in nature

Implied Volatility is a very difficult concept to grasp (at least it is for me) so I might be wrong here but the way I see it is that IV is not DIRECTLY related to its underlying price but rather to PERCEPTION of risk (i.e. a fear gauge) that is reflected in Option Premiums (Premia?) all along...

good point, exercise and assignment, while not catastrophic, only make everything messier...close it out before or on expiration date and it will be easier to manage

Please please please keep trading without any concern for greeks... this is how we (the ones who do care about greeks, like Kim) make sure we stay in business in the long run...

I would try to get a few good books on options trading so you can see what this business is all about on a professional level. Try to get any book by Natenberg, Hull, McMillan, Cottle and the one book about options that Nassim Taleb wrote, "Dynamic Hedging"

You don't need Options or Options knowledge to profit from this premise (assuming it actually works and he's not cherry-picking the trades he shows) Does he go into how to minimize time decay while waiting for these moves to occur? What is his overall portfolio's directional approach? Does he...

I am sure you are also aware of this so if you are just ignore my comment but do you really understand the implications of an ETF whose return is 2x daily? Take this example, a fund that returns 2x daily on VIX, let's call it UVXY (I know it does it with futures but bear with me just for this...

Your returns' dependence on 1 trade would lead me to believe that your strategy is not very robust (i.e. capable of withstanding a wide variety of market conditions, moves, etc) As a quick and dirty estimate, a straddle implies a probability of profit of around 55% for the seller and 45% for the...

No need to guess, option prices indicate the collective best guess of the market (with millions of dollars supporting it, so not "just a guess"). In this case the market indicates there's an 8% probability of AMZN finishing below 780. Alternatively, you could use the 15-DEC-2017 780Put delta for...

UNDERLYING PRICE METHODOLOGY – COMPOSITE OR CONSOLIDATED PRICES Since 2003, OCC has used the “composite” or "consolidated" closing or last sale price reported by OCC’s price vendors for underlying security prices. (OCC’s price vendors for underlying security prices for expiration processing are...

If this doesn't raise any red flags I have a bridge to sell to you :-) Seriously if you buy deep OTM backspreads you are going to be losing most of the time until that time when the crash happens. This is not as outlandish as it sounds as I believe Taleb uses something similar and his is a mind...

For Volatility in particular I have just (shame on me) discovered Euan Sinclair's books and they are quite good and understandable.