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It didn't come from the phone conversation. We never talked about your strategy on the phone. You mentioned that you made good money trading options when you talked to Don Bright in tape reading thread. I think you also mentioned that your strategy might have many small loss, but give you...

I agree with OTM calendar, but why rangebound stocks? If you know it is rangebound, there are many other ways of making money.

Mav, You are contradicting yourself. Did you mention that there are no good strategies, but only good traders? No strategy has "postive" expectancy, and all options are effectively priced. A naked writing has the same expectancy as other strategies. Why can't a good trader make this...

I didn't want to be a copycat. My interest is like a detective, to discover the whole truth from the partial facts. BTW I don't think that mav makes money "consistently", but I do believe he makes good money on average.

Tim, By looking at your greeks, your multiple calendars are very different from standard calendars. Your negative gamma is too high. A big swing will hurt you even with an increase in IV. I am saying it for discussion only, and I never traded XLE. It might work out well with XLE because...

I am the one who try to get all the pieces from the 5 pieces that Mav has been giving out so far. I haven't put the strategy in action yet, and so it is not me who blame Mav. So who blamed Mav so far:confused: :D

I can't give you a concrete example. It depends on how the trade went against you. The episode, your market outlook, your leverage and your risk tolerance will determine your appropriate actions. Let me tell you why I think they are important instead. When I worked with the strategists...

Phil, As pointed out by Cache, the current low IV environment makes it a low return for SPX credit spread. We should look at diagonals, or look at rut credit spread. Rut still gives me a pretty good return on margin (This Nov I realized a return of over 10% on margin using rut ICs).

Let me see if I understand Mav's strategy. Curvature is the shape of gamma. Mav is buying the curvature (one way is to buy a lot of long term options). The idea is that the longer term option decays a lot slower than the short term, and so he is still making money via time decay. It is...

It is the topic of optimal position sizing I mentioned. Optimal position sizing or optimal leveraging depends on your strategy and your trading style. This is an interesting topic for hedge fund management. You want to optimize your expected return, and in the same thing, your porfolio...

[edit] you can't manage your portfolio without any reserve. You want a "good" fund manager who knows when to get in the market, and when not to, not someone who just continue opening credit spreads with full capital involved. If you use all the capital for credit spread, one black swan will...

Those capital sitting there are actually working for the porfolio :D

You can check Max Ansbacher's website. In one of his presentation, he mentioned something like that. His book, "The New Options Market" also mentioned this approach for surviving as a premium seller.

Domestic, I don't think any retail trader can trade like mav because he is using haircut. His method doesn't work for retail. Haircut trading is very different from reg-T. [edit] I better let mav speak for himself.

RM, If my memory is still functioning properly, mav is not a short gamma trader. On average, he longs more gamma than short.

Mark, I agree with you on the statement here. If I have decided to devote 10K for DD, I might not use all 10K for one position at the same time. I might risk 5K initially, and wait for another better opportunity for the remaining 5K because of my market outlook. If It turns out that my...

No. LTCM failure is a different story. The major problem for them is risk management. They basically averaged down. Position sizing is the key for trading success. The reversion of mean is theoretically correct and the strategy works only if you survive long enough. Same thing for...

Kapil, I started using a normalized method when I started spreads and diagonals and it gives me a visual understanding of my return and my drawdown on my capital. All the data values for today are normalized as 100.

Mark, Your statement is not entirely true. Depending on your exit or adjustment strategy, the return on capital might be very important. For example, because I use very active adjustment strategy for DDs, I reserve half of my capital for possible adjustment in the first week. My reserve...

covered jan 690/nov730 put @ credit of 3.7 a gain of 1.1 for the put diagonal, but a loss of 0.35 in the call diagonal, so a net profit of 0.75 for a margin of 40. Less than 2% on ROM. I still own the dec 840 call, but it worths nothing now. DD is a bet on vega. Since IV is low, and...