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Pure semantics. Cut the quibbling. Don't know what anyway? Like I said, I'm a day trader when right, a buy and holder when wrong.

I said do this with quality issues, and without leverage. I do this with diversified ETFs mostly. Bear Stearns was always a high flier. I wouldn't use this with any of the financials. If I did branch out into stocks, I'd only use a small percentage of my funds. OP, do listen to this shit...

Of course you'd say so. My advice flies in the face of every the trading books teach, as well as the numerous experts on this forum. Cutting your wins short and letting your losses run? It's exactly the inverse of what we're supposed to do. Yet, plenty of traders play by the book...

Does it absolutely have to be day-trading? How about being a day-trader when you're right and a buy and holder investor when you're wrong. Trade only quality stocks or index/sector etfs, getting out when you succeed, but never cutting your losses when you find yourself losing. That is, just...

I'm clearly outvoted in my view that this is the wrong term for the trade. I've never worked on the floor, as I prefer staying home in boxer shorts to trade, so I don't know the floor lingo. My objection to the term is that it speaks only to the ratio of long and short options in each leg...

No need to be a guru to contribute. If you have a thought, please share.

The best way to get a sense of the profit and loss potential for this and any trade, I think, is to simply have a look at a risk graph. The following site has risk graph and prose explanations of almost every type of option strategy possible...

Thanks for responding. As you were saying, the key is not to get greedy. The examples you cited all used egregiously excessive leverage. Put sellers in '87 got burned to the tune of millions due to leverage. Meanwhile, a put sale is synthetically equivalent to the oh-so conservative covered...

Yes, the final choice of which markets to use for straddling--or any option strategy--must be based in large part on the status of IV, specifically its position relative to its own range and whether the risk priced into it is being exaggerated. I stated as much, and offered a hypothetical...

Thanks for responding, drcha. That's exactly what I wanted to get at: which underlyings? Treasury securities, particularly the shorter-term ones are tamer than, say, natural gas, but option premium is commensurately lower on the former. Despite the lower level of premium protection with the...

I was wondering the same thing: What kind of job would you be quitting? If you're in business for yourself, you probably take on risk every day (e.g. the restaurant business, owning a store with inventory, etc.), but few businesses pose trader-sized risk. By that I mean that traders tend to...

Yes, that is clearly true. The implications of vega exposure are not to be ignored. I try to choose underliers with above average IV within their range, but with IV on a downward slope. Hopefully, the vega exposure will actually be of use, rather than hazardous. If vega seems fearsome...

Is it just my perception, or is the viewpoint that short straddles are relatively high risk strategies quite prevalent? It seems like the majority of the contributors here on ET and elsewhere look askance on short straddling, writing off the strategy altogether as being entirely too risky...

Great feedback, everybody! Thanks. Atticus, may I ask what prompts you to sell LEAPS straddles, when you do? Is it the lower gamma, or perhaps the higher vega? Looking forward to more food for thought.

Hello friends, As in all strategies, success in short straddling is likely contingent in part on practical factors such as liquidity, bid-ask spread, margin requirements, etc. There's also the factor of the underlier's style of price action, i.e. whether it makes abrupt moves (e.g. energies...

100 option contracts costs $70 at IB (I trade with them too). At eoption, it would be $13, as stated above. If limit orders are used, it should be far cheaper to trade with eoption. What am I missing?

The aggregate IV of the RUT, quoted as the RVX, went down 2.12%, but what did the IV of each leg do that day? Did the IV of your short legs go up, while the IV of the longs went down, or some combination thereof? That has happened to me numerous times. Vega can be misleading in that way...

I haven't tried doing that, but in view of the posts by you and MushinSeeker, who suggested the same concept, I am going to try it out on paper. I imagine it's a whole art in itself to leg into a portfolio of butterflies to create an optimal position. As Maverick74 was pointing out earlier...

Nice video, Joao. The only thing I don't quite agree with is looking at premium as the primary guide for shorting. I've learned the hard way that inflated premium is a harbinger of a big move. One shorts it at one's own peril. Of course, the double BWB is pretty safe in the event of a big...

You guys are awesome. Great community we've got here. Thanks Maverick for your candid input. Good feedback on what happens when spreads are excessive of legs, especially when the goal is theta proceeds. That kind of real-world experience is worth more than mere theory from books or...