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rotfl :) Good advice. Yes yes; 100% is the perfect number - 80%... blaahhh

Ah i should have said long vega instead of short vega. That should make sense now.

Mav, resurrecting an old thead. if you buy a call and after a few days and an up move you complete the other legs of the conversion to lock in a profit, you might as well simply sell the call at a profit (unless its too far itm and hence needing the conversion to lock in the gain) - i dont think...

jimmyjazz, sorry i did not understand your question. Can you be a bit explicit.

You are reading it right. Long vega on bull is a killer as even if you are right on direction vega loss might overshadow your directional profits. Short vega on bear spread is good when direction is correct; but will hurt twice as bad on an opposite move - loss due to directional bet as well as...

The biggest thing you need to keep in mind and analyse when playing with cals/diagonals is vega risk. Any type of cal/diag is going to be long vega - so better put on when that particular series vega is towards the lower end and you expect it to expand. For example you can many times setup a...

was curious and checked out collective2. Buyer beaware. One of the top option strategies there seem to be shorting naked vix calls and they call it income fund.. haha.

Nice story wrbtrader. This reminds me of a trading room i was in almost 5 years ago trading using market profile. The moderator talks a very good talk and it seems he is trading live and thats what they market it as but i was once recording a few sessions to learn more; and during a particular...

yes; but if you look at the payoff - it evens out. Think area under the curve - its all perfectly priced.

Here is pnl curve based on next months options. Theory should remain the same; here is the IC collecting 1.28 on a width of 1.50; there is a 17% chance (.22/1.28)of it being in the profit zone.

I like to use the pricing of options as better indicator of probability (in liquid markets specially) than even the deltas - fewer approximation errors and easier to deal with also. Its a 75cent spread (mid of 70-80); and max it can go to is 1.50. So its a 50-50 shot with negative theta. So as...

Interesting. Thanks folks!

Hello Chisel, For spreads less than 5 bucks it seem to be true; can you try to price a spread bigger than 5 bucks and see if it still lets you use .05 increments. Here's a picture showing the price is invalid and looking at the bid ask; it does seem they actually trade only in quarters:

Hello ktm, The front end on IB doesnt let me change in less than quarters; so was wondering if its a software thingy or an aspect of the market. Maybe i will just call the helpdesk.

Hello Folks, Quick question. Do non-calendarized ES spreads (say ICs, Verticals, Butterflies) trade in .05 wide increments or is it .25? IB currently lets me change in only quarter increments; but i wonder if its a software setting or IB issue vs the contract spec. PS...

heech, Waking up an old thread to see what your current though is on this subject.. -gariki

Curious. Do prime brokers provide additional leverage? Other than what is provided by say the general margining rules (SPAN for example). -gariki

edit: i think it was sterling afterall (customized to echo) - dont recollect correctly.

No piyayo. I was researching sterling; but never used it. I was using Echo's platform - i eventually got used to the shortcut buttons.

Free on tos.