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Just place your order in the middle of bid/ask. You may need to move it a tick up or down after a few minutes. I also have access to live Block-Scholes option pricing, so I check that as well. I haven't had to hit the bid/ask in years ( I trade ES futures options). Also, remember, option...

I employ iron butterflies. Sell the ATM, near money call/put and buy a call/put OTM for protection. I believe the comfort of protection far outweights the inflated cost of it. If you want to manage these aggressively and stay delta neutral, you will be closing out winning shorts and replacing...

Problem with low volatility environments--you don't really know which way things will go. In this environment, options are cheap. Therefore, consider a long straddle. May want to go out to 60-90 days expirations (May or June at this point) to avoid serious time decay. If volatility spikes...

I also have looked closer at maintaining delta neutrality. But I onoy look to adjust after wide delta swings. For example, take a long straddle. Since I use the ES as my underlying, my multiplier is 50. So, suppose I enter five long straddles (long front-month ATM call and ATM put. It is...

I am more comfortable with credit spreads, but I use long straddles when volatility is low and I am not sure of direction. Once the volatility peaks, those gut wrenching days, that is when I exit the spread. If I am trading more than one straddle, I can stagger my exits. Spikes these days...

FWIW, do not fall in love with one type of spread. It is like the proverbial round peg/square hole situation. You need to know your greeks, have an opinion on direction of the underlying, and have an opinion on the direction of the volatility. Bull put spreads do well when placed at...

Thanks for the info. Will ditch the caps.

I've been with IB for quite a while, and while many complain, I have been happy. I am just curious. I trade a large number of futures options spreads using the TWS. It allows me to construct the spreads so that all the legs can be entered at once. Are there any other futures brokers with the...

Regarding Margin. This spread requires extremely little margin--again, I trade the s&p 500 emini. Therefore, I am bound to SPAN margin. To give you an idea of the margin equirements: You need $5300.00 to buy or sell 1 s&p 500 emini futures contract. To place an ATM call or put, you...

NO PROBLEM. YOU'RE JUST NOT SEEING THE MECHANICS NOR THE TIMING, NOR THE REACTION OF THE CALLS TO THE MOVEMENT OF THE UNDERLYING OR THE IV.

It is not enough to pick direction..the volatility matters as well..and getting out when your goal is reached. Options do not have to be held to expiration. Take yesterday. The front-month ATM put option increased by 8 points. If trading s&p emini futures options, that translates into a...

Solution: Don't buy crappy stocks. Stick with ones paying consistent, ever-increasing div's--the companies are out there..I named a couple.

Couple things. I trade the s&p 500 emini futures options, so no chance of early assignment. Second, regarding using a stock as the underlying--there is no guarantee that you will be assigned early on the back-month option..as a matter of fact, you probably wouldn't anyway. The front-month...

As a group, we do not talk enough about current option strategies. What I mean is we don't analyse, as a group, where the current volatility rests--in relative terms or absolute terms, or even its trend. In the same breath, we don't discuss the trend of the underlying. We all know that...

A point I think I am not getting across: I am limiting this strategy to when volatility spikes occur--and I think we all can recognize a volatility spike. I do not believe this is a strategy to be placed routinely without thought. If placed at a volatility spike, it has a much greater chance...

There is really no way to rescue this trade. A good trader would ahve never let this thing get this far. Right now, you are looking at a paper loss of $50,000.00--I am certain that your risk:reward is way out of whack. In the future, if you must do this type of option strategy, you will do it...

A strategy I have used in the past is to purchase stock in strong companies paying a decent dividend (like now, since there are a lot of decent companies with divs over 4%). Then, I sell LEAPS about two strikes above the underlying. My goal is to keep the stock and keep receiving the premium...

I did forget to mention one other thing that is important--this spread is to be exited 30 days prior to the expiration of the near-term option. Therefore, the loss will be much smaller than anticipated. I do understand, if the spread is held to expiration, that the loss will be much higher. I...

I appreciate the explanation spindr. I input the parameters into the P&L graph within the risk analyser, and it appears that my profit could be greater than the 16 point credit I received. Is this possible? Or am I truly limited by the credit recieved minus the greater-than-zero buyback...

There is one thing that puzzles me. I set up the spread---buying 1 APR ATM call and selling 1 JUN ATM call. The spread does appear as positive numbers. For instance, the recent bid/ask was 15/17. To place this spread, one has to sell it. So, I sell it for 16. Now, suppose the VIX drops 10%...