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How is this trade "very risky"? At front month expiry, aren't you just risking the net debit to place the trade?

A short call, sure.

I don't even know what you're trying to say, but you seem convicted. Carry on . . .

You're the one who fudged the pennies in the first place. Apparently they were pretty important to you, no?

Sorry for the bump, but I've been studying double diagonals, etc. and came across this thread. A key part of the discussion has centered around the short strikes of iron condors (or credit spreads) going ITM and what might happen, particularly with puts. It has been stated many times that...

Now THAT deserves a :D

I don't doubt that a contrary move would be painful -- there are no free lunches.

Well, one could buy a DOTM put to hedge, but now we're right back at a credit spread and its issues. (I don't know if a credit spread structured in this manner would have the problem of not gaining value as the underlying moves until close to expiry. Something tells me it wouldn't, as the DOTM...

Correct. I don't like the negative gamma. Wouldn't vega be in my favor? Theta too, but many of my trades are over within an hour or two, so I don't worry too much about theta even when I'm long.

Would a short put work better than a long call as far as swing trading goes? I have my concerns with the risk profile, but if my intent is to get out within the trading day, I might be able to live with those.

You're basically talking about normalized B/A spread, right?

Thanks, I'll check out McMillan. Does he go into the tradeoffs between DITM/ITM/ATM/OTM ???

In general, I feel more comfortable calling price direction than volatility. Over the past year or so, I have been relatively successful trading long DITM calls or puts as a proxy for the underlying. I am trying to figure out if this is really the best approach towards grabbing a small move in...

Did you stick with it? Nice little move to the upside, and now it's off the 200 SMA. My favorite strength indicator says it has pretty much bottomed. PSAR (which can offer reassurance) has flipped to bullish as of today. Personally, I would look for a little more accumulation before...

Every ATM put (50% delta) "protects" 50 shares. If you want to protect half your position (i.e., protect 500 shares), buy 10 ATM puts. You might have more predictable results buying fewer ITM puts with higher delta, but you'll pay more. This is not advice. I'm just trying to work within...

EXC is parked right on the 200-day moving average, which could be a good test. You're either at a bottom . . . or you aren't. Momentum seems to have leveled off. Distribution seems to still be ahead of accumulation, but the latter is catching up. It might not be the worst time to sell some...

How many times are you going to post this question?

The peanut gallery has a peanut gallery?

That's a good way to put it. I tend to trade long calls and long puts mostly because I try to pick reversals. I am not good at forecasting price at expiry -- that's too far out. But you're right, in the event I am either early on the reversal or the trade just moves too slowly, theta hurts my...

Excuse me? Oh, I'm sorry. That was impolite. I meant "fuck you". Nowhere did I claim $1-$2 was deep OTM, so you can start with some reading comprehension. Furthermore, I do think it's risky to go that far out with only a day or two to expiry.