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I think he wanted to point out that you could daytrade with 10k instead of abiding to that idiotic rule. You CAN have 25:1 but you also can trade 10ß $F with your buying power. In addition you get better commissions and direct access opposed to working with an individual account with a broker...

It depends. There are specialized shops like flowtraders or optiver that basically quote anything they have edge in. They can have hundreds of thousands of vega in total but they move around their surfaces a lot, especially in illiquid names Then there are the big internalizers who trade...

#1 source of edge is inventory constraints. When you're loaded to the brim because you just soaked up a big ticket, you skew your quote. If you keep quoting at "optimal" price because your model said this is it, you'll find your self in a conversation with your clearer pretty often. If no other...

Alright, thx. Systems like these are as old as time and I even invested in one once. They tend to work but returns are too left skewed for my taste. Good luck

You're trading a correlation basket that's mean reverting around leverage?

yeah probably. But I'd rather spend 10.000 hours on figuring out how I can buy something for 5$ and sell it or something similar for 10$ because there is already someone waiting for it to buy it at 10$. But it's just me...and probably the entire financial industry.

This is probably the best written summary of what trading is all about!

of course you're free to collect carry vs RV and flatten your gamma position with a calendar. It's the vol edge that makes money, no matter how you structure the trade.

Here's the thing: you are right under certain circumstances. When the move is a surprise, IV will skyrocket. Look at BBBY. Where calendars are good is when the market anticipates a move and IV inflates BEFORE the market moves. You want to normalize vega to the maturity that has most liquidity...

In 2008 there were some occasions where you got the 1m6m calendar for free...of course you bought as much as you could EDIT: I just realized that in the screenshot I violated the term structure no arb criterium. Front month should never be more premium than backmonth....I hope you get the point...

a typical scenario is the expectation of an extreme move that elevates short maturities above longer ones. You want to open a calendar with strikes in the direction of the move, e.g stock is at 100$, you expect a move to 80$ so you buy the 80$ calendar. Typically skew is also high to the side...

my equilibirium is in the middle of the bid and offer

100% no. Think about it like this: An option has 100$ premium and 20 DTE. We now asume theta is linear (which it isn't but...you know, simplicity) You collect 5$ per day. If the option has 200$ premium you get 10$ per day, makes sense? Now what about gamma? Think about a 100$ strike option...

first of all, at least you're doing your homework and unless you're behaving like a dick, there is no reason to be mean :) Second, when you short front/long back your gamma/theta profile gets worse and worse because the front month decays to a point where there is almost no optionality left. I...

the chartist: Imma sell the gap down below resistance, old gap closed, stop above gap, yada, yada. wise guy: short float 30% and someone bought a metric fuckton of calls today. (these are the additional puzzle pieces btw...) everything is in the price...even the 29ct ramen noodles the...

as the others said, trading ATMs is really hard because ATMs never stay ATM...you're betting against vol/spot correlation here. FOMC tomorrow btw....just saying because "safe for a 1std move" :) thumbs up for putting the trade up here, tho

compliance, transaction reporting, audit. That shit costs you an arm and a leg...everything else is peanuts

Well no. I'll be out when the last share is liquidated and you'll be out when the price runs against you...and that's probably the difference between losing and winning in this scenario

1. there is a fund going busto and it has to liquidate all its positions. You know its holdings from the filings 2. you have a chart 1 or 2? decide for yourself

thats the point. I don't care where the market is going and I don't care about price. Price pays but value trades.