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How do you like OH in general? Have you experienced any problems similar to what people describe here: http://moneyning.com/review/optionshouse-review/#comments

Very good. I bought GRPN 6/7 strangle on Thursday for 1.10 and sold on Friday for 1.25. Different entries, different times, similar results.

How do you negotiate with a broker (TOS or any other)? I tried to chat with TD Ameritrade rep just to see how far I could go and I asked them to match OptionsHouse promotion. They did not want to do that. Is there a "secret" negotiation technique?

Exactly! 'Fly's max payout is a myth and should not be taken into consideration. However, a wide IB may be a viable strategy if the target profit is in the 10-20% range of the max risk. E.g. SPY Sep 135/140/145 iron butterfly may be established for 3.66 credit. The risk is 1.34. Once SPY...

Since March'12. 106 trades so far

For 10 ICs (40 contracts) total tradeMONSTER commissions are 40*.50 = $20. $15 is a minimum for spreads. If you sell 1-7 ICs, your commissions will be $15; for 8 ICs it will be $16, and so on.

If you trade SPY, then 10 spreads is probably your minimum to make any meaningful return in absolute terms. These are the brokers and their commissions for 10 spreads: TOS: $60 IB: $28 TradeMONSTER: $20 OptionsHouse: $18.5 eOption: $16 You're paying way to much.

How do you calculate commission of .06? This is $6/contract, correct? If you pay such commission, run away from that broker. Others charge a lot less.

A general rule is 2-5 days before the release: 2 for weeklies; up to 5 for monthly options. It helps if the overall market is quiet on that day or VIX is down. If not, I may wait for another day. I prefer that a strangle or straddle has some small delta at the time I enter my order. At first...

Maybe so but it works so far. There is always room for different entries as the underling moves and everyone will not be able to jump on the same trade at the same time.

There is another way to play earnings: Buy a straddle or a strangle 2-5 days before the release and sell it any time if the position if up >10% or on the last day before the release. The win/loss ratio is about 65/35 while the average size of the winners and losers is close to 10% of the...

If you have 10 groups of ICs, are they correlated (e.g. RUT, SPX, NDX) or non-correlated (e.g. SPX, GLD)? In other words, if a large movement happens will it negatively affect all your positions or only some?

@cdcaveman: I am a big fan of Taleb as well and I am looking for ways to implement his "barbell" strategy. I found one possible way with earnings straddles/strangles. However, I also want to add some positive theta to the mix and therefore I look at ICs and IBs as possible candidates.

Agree, but calculating probabilities based on deltas is not an exact science. There is no way to calculate probability of future moves because we only have past data to operate with and past does not predict the future. Some options newsletter writer got burned in Jan-Mar'12 (~20% loss) because...

Not sure about your math but 7.5:1 risk/reward does not seem very attractive. Also, I don't feel easy about all these double-down rolls. It goes against "never average a loss" principle. I heard about other adjustment procedures though: 1. Close the winning leg and move it closer to the...

I guess I misunderstood you. So, let's say you have 10K and open one IC with max risk of $210 and max profit of $90 (using .30/.70 numbers from your other example). Some time later you want to open another IC with similar parameters. Will you close your first position and then open a second...

@cdcaveman: Thank you for the great material. I've not looked at ICs from this perspective. @all: One thing that the article did not mention was her position size relative to to her account size. Yes, she has 65K on the line but is it 100% or 1% of her account or anything in between...

... where? don't keep me in suspense. Do you have a URL to that article?

That's why I asked him about position sizing. If taking a close to total loss is the only option then the overall position should be fairly small.

@cactiman: How much of your account do you allocate to an IC trade? What do you do if it goes against you?