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When you add one leg to any portfolio, you are actually changing your risk from one form to another. Most of the time the long wing is a waste, like an insurance. By adding the long wing, you buy the insurance and it reduces your credit. I will prefer to buy the wing at the proper time...

stc dec 700 put @ 0.5 x 3 btc nov 780/ sto dec 800 @ 0.1 credit x 3 [edit] This month is down around 10%

Coach, Sorry for your rough day. I think Mark has explained the idea well enough, but I want to add that the long wing strategy has an added benefit for your prop account. You should look at how the long wing affects your haircut. Once you look at it from leveraging perspective, you...

With all the warnings stating this is a better environment for diagonal and not so good for ICs, I actually lost money with DDs and made money with ICs. Too bad that I put more %age of my capital on DDs, my return for this month is only 2% for my whole option portfolio. (My return for RUT ICs...

Art, I don't really understand how to use your system. Is yours a reversal system? That means, when you get a "buy" signal, you get in, and get out and reverse when you get a "sell" signal?

Mark, We are in the same boat! I covered half of my short leg, making a positive gamma with a large vega. By creating a positive gamma, I still have a chance of making more. Currently the return is just around 1% of my capital. The expiration week has been my killer for the last 2...

Closed nov 780 @10.7 x 3 The naked call cost me a lot of money. Didn't realize the skew hurts the naked ITM options badly. I have to take it into account in the future for computing risk. Couldn't believe the portfolio can go from +5% return to -10% in a day.

I agree. I have studied haircut leverage for around 3 months. I am so suprised that no one here talked about strategies together with optimal capital utilization.

closed jan 840 @0.25 x 3 My nov 780 is naked in my opinion, but the margin is highly reduced because of the nov 820 which is worthless now. My whole trading style is based on adaptive leveraging, a method to get the optimal leverage.

Sailing, How is RUT option? I am currently at around 5% return on my capital. Do you use Liquid or NCompass for your prop account?

What about if we are using haircut? I believe it is slightly less than span margin, but pretty close. Higher leverage comes with higher risk. Basically we need to find a strategy that works well with your margin rule.

Mav, I knew they are exchange members. Do they have to supply both bid and ask for each quote? More specific, what advantages do they have over remote traders beside commissions? Just want to let you know. I have changed from a pure naked writer to a bounded gamma trader. I appreciate...

That will be really sad. Though I don't know if Risk or Mav makes money, I was able to extract useful info from their posts and have improved my bottom line. Let me say thank you to all who have helped me a better trader before you leave this wonderful thread.

Mav, Please forgive my ignorance. What is the main difference between a remote market maker and remote trader with haircut leverage? What infrastruture do you need to do it at home?

Ben, To me, option trading is a NP problem. It means no one / no supercomputers nor algorithms can prove he/she got a complete solution. There are thousands of ways of making money in trading options, and trillions of ways of losing it. Trading is a process, and I try to solve it using...

Ben, There is no strategy that will provide you a positive expectancy, and I haven't tested out my 'haircut' strategy yet. It is hard to explain my strategy because it is not a single step. It is a sequence of actions based on the market actions. Because of the sequence of actions, I...

Mav, I am sorry to have misinterpreted your strategy. Since our first phone conversation, I have been spending many hours everyday to find a strategy that should work well with my background and haircut leveraging. I have discovered a strategy of reducing risk with the benefit of higher...

Donna, I don't know what happened to RA, but I feel very sorry to hear that. He has been a virtual mentor to me. May God comfort him and his family. I wish we care each other in this group while we learn from each other.

TS, If you can achieve an annual return of 28%, why do you explore the high risk, high stress IC strategy? Why do you need advisory service? You should start your own hedge fund or advisory service to get a "risk-free" high reward return.:confused: