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10% slippage on straddles would mean that the price change really is due to the piling in of orders. The strategy that I heard of utilising this increased volatility requires the opening to be delta-neutral - so smack on a strike price is the best. Normally on a straddle sale call/put parity...

See bold and underlined remark; you are making my point. To make the moves comparable and draw conclusion about the (un)desirability of a trade you should calculate in SDs. The OP (and I really mean the OP whom I was reacting to) pointed out that JnJ tended to move only 2.4% - this may or may...

This seems obvious to me - you cannot execute large orders in the same way as retail orders. Institutional investors often have awful execution because of liquidity.

+1 on that one. Bear markets are much shorter than bull markets. The first investment book I ever read was Peter Lynch's one up on Wallstreet of 1989. He makes the same point there only excluding the early 1970ies bearmarket which was longer. Having lived through everything since 1985 I can...

Paper trading also has its limits and real trading is hard work. If you can consistently score 8% a year you are a wonderful trader already. Such a return doubles your money every 6 years or so - its huge - dont get blindsided by the good/lucky times when you make more. If you lose 80% in a year...

(Tough love ahead) Here is what I read: - I dream of getting rich quick - I listened to some marketing BS - I had a lucky trade that made a bundle - I then traded without concern for position size or loss management and lost everything - I paper traded 90 transactions in the space of 8 weeks on...

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This strategy is used on single stocks - its just a strategy man - there are dozens of strategies. That you dont care what anyone recommends is clear - that's your prerogative. The fact that you dont see the irony that you use a tool to demonstrate this strategy doesnt work when the very people...

LOL - that's the wrong criteria for starters. You have to look between 14 days to 7 days or so before earnings. Implied volatility ahead of earnings begins to trickle in at that moment. The biggest sweep up in the volatility occurs in the last 7 days so if you look at 3 days you are buying heavy...

You call a 4% move of the underlying minor?

The way I traded it is using a back test against a number of companies with upcoming earnings. I made such trades as recently as September/October for AZO, ATVI, GOOGL - the google trade brought a small loss. The others profits - I am planning to do this again where I find the stocks that have...

srinir - I am not a client of Kim's but I can confirm his strategy is valid. It plays the odds of increasing volatility ahead of earnings which you can combine with knowledge that some stocks more than others tend to move on earnings. Some other stocks are in fact immobile and these groups of...

A lot of things are hypothetically equivalent but can work out differently in practice. In continental Europe margin accounts are not really common and hence trading stocks in margin is less common. I am pretty sure psychologically some people - wrongly - feel that buying a ITM option is somehow...

Tesla is not a value play but a momentum play. Stock might drop to to 260 but I doubt it, 280$ more likely but it already looks stable at 300$. It will start going up as fantasy returns and the results drop in the background.

If you have the time start by quoting a nickel below the current ask and wait to see what happens. Depending on the liquidity of the stock option in question this goes from a minimum of 5 mn to a day or so. Gradually step down - not infrequently you will see either the bid dropping below yours...

Bah you are changing the goal posts - I wasnt the one that brought up the historical result of BMW. In fact I think the two stocks are incomparable. BMW is a great company and certainly I wouldnt mind owning it - TESLA by contrast I own only through options.

Thats actually completely the wrong comparison to make: If you had bought Tesla on 1/1/2013 you would have made ten times your money to today. If you bought BMW - even at the peak in 2015 you would have made only 100%.

And the above is why you should buy TSLA and not BMW. For option traders TSLA has the IV which makes it good to trade.

I have been long Tesla since early last year more or less. I use options to reduce the cash outlay but to profit from the upswings. I started just doing bull put spreads but since mid 2016 tend to buy options 9 months to a year out with a 40 or so delta. I sell when we are getting too close to 3...

Certainly true - just not what the OP was asking. He was wondering why his margin fluctuated