Search results

SPAN margin requirements are relatively low for reverse call calendar spreads (matter of fact, it is the lowest requirement for any spread I have ever done)....therefore the returns on margin are incredibly high when they are successful. I would trade them using a VIX chart only. Take a look...

An Option Strategy for Trading Market Bottoms at http://www.investopedia.com/articles/optioninvestor/02/081902.asp Here is the link. Couple other things. I trade with IB. Using the ATM 60-day and 120-day expiration calls, the bid/ask for the spread wasn't very wide (maybe a point to a...

Yesterday, I read an article about reverse call calendar spreads. Anyone use this strategy? Your long call--do you use one with 60 days until expiration? Your short call--do you use one with 90 or 120 days to expiration? Do you have any trouble executing this spread at a fair price or are...

Sure. Call options were greatly overpriced. I wrote covered calls right up until the decline. I was getting between 30-40% return on these--and this was with margin. Interestingly, I would have done better buying the stock outright and using trailing stops to exit. Great example: I did a...

Great story coyotetrader! Tweaking is the biggest problem for most traders, especially experienced ones. Tweaking is done because the trading system failed one time (fear). It is also done to increase profits (greed). I know that every time I deviated from the plan, I lost money--except for...

A small piece of advice--use this technique only if you plan to own the stock. IMO, this is a great way to get into a stock at the price you want--you are paid for being patient. If you are planning to speculate with this technique, I suggest two things: use an index (spy, spx, es futures...

I use long straddles as additional portfolio protection. I use options that have 60-90 days left until exppiration--to avoid time decay. Therefore, they are more sensitive to volatility increases. If I think that increasing volatility is a problem for my current trades, I place ATM long...

The bid/ask's shown are derived from the actual bid/ask's for each leg, so the playing field is level. Every trader looks at the same bid/ask. Forget about the market maker....by placing our order between the bid/ask, if anyone submits an order opposite your legs, it is executed. I have never...

I've been entering spreads all at once: verticals, iron condors, iron butterflies without any problems. I simply use the combo feature. Then when I am ready to place the order, I start out placing it half-way between the "bid" and "ask." If it is a sell order, and it isn't filled within a...

February IV for GOOG: 22.71; March IV: 24.09; June IV: 25.8. So, what are you buying? As IV decreases, option prices decrease; as IV rises, option prices rise. So, once the IV hits that low "magic" number, then buying a put or long straddle makes sense. I do agree that long-dated options...

When you construct the spread/combo and it is user defined and not showing negative numbers, and accepted by globex, it will be a working order when you transmit it. It doesn't show up as a bid/ask though. But, if you hit the bid or ask, it will execute right away. Your order showing up as a...

Trying to stay delta neutral--as a small-time trader--is futile. I have tried it, and it requires constant monitoring and trading--and you still lose money doing it. The only people that can stay delta neutral are market makers. Market makers are typically short the underlying, long the call...

Good comparison--as I agreed above. Now, any opinion as to the direction of the VIX short-term?

I like your suggestion. Gives us a chance to check volume behind the move. The chart for VXX really looks different than the VIX, though. Anyway, expected high volume on those huge up days, and low volume on the down days. Not sure how this helps. The VXX is at 30 or so. The six-month mean...

Recently, after years of trading, I finally ask myself this question before I place any option trade. When I am right, selecting the option strategy is easy and the results are pain-free. When I am wrong, I lose. So, now I am trying to improve my VIX forecasting using reversion theory. Take...

I pretty much do the same as the rest except for one thing. If I am entering say 12 spreads, I will only enter 4. Once they are filled, I will enter four more until I am completely filled. I trade ES on Globex. I can get filled halfway between the bid/ask most of the time, but sometimes I...

Mark's comments are correct. I use IV to determine future trends by looking at ATM call's IV going out a few months. The key word is trend. I also take a look at VIX for absolute value as well as trend. Again, the key word is trend. Next to direction, volatility (IV, vega) is most...

For example, the GLD is currently trading at 111.54 and the FXE is trading at 144.8301. You believe that gold will rise faster and farther than the dollar will weaken. I suggested a hedge. You could buy 200 sh of GLD and sell 100 sh of FXE. If both gold and the dollar go up, you make money...

So what strategy are you looking at? How about long straddles? Delta neutral taking advantage of a volatility increase and a huge move in either direction. Even if the underlying hardly moves, but volatility goes up, you win. You can also win if volatility is flat or lower, but get a huge...

Let's suppose the market tops out at 1200 sometime this quarter. Then let's assume that it corrects 10% from 1200 and it takes two quarters to do so (finishes the third quarter at 1080). Now we have no idea what this correction will look like. Then suppose during the fourth quarter the market...