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Well, I have nothing further to say with regard to the Greeks, not because they aren't important, but rather because I've been rendered nearly speechless after reviewing your trade. Have I misunderstood you or did you actually establish a position that netted you a whopping 35 cent credit with a...

In, I have to respectfully disagree. While it is true that for certain strategies such as OTM credit spreads, assuming you hold to expiry and the market behaves in accordance with your directional outlook, what happens to the Greeks during the life of the trade may be seen as irrelevant...

Stop what you're doing and learn your Greeks immediately! With vertical credits and IC's, besides being negative vega in a low, but recently rising volatility environment, theta is your friend and gamma your enemy. I strongly suggest you understand why and how you might hedge those risks before...

He is also operating on the ridiculous premise that MSFT calls might actually appreciate in value. That, I'm afraid to say, is a virtual statistical imposibility. The empirical evidence resides in my account.

GA, I don't want to speak for Arb, and goodness knows he can explain this a lot better than me, but what I think he's referring to is the tendency for the volatility skew seen most prominently in various index options to propagate itself throughout the chain as the underlying moves around...

Don't you mean a vacation FROM trading? Increasingly, I entertain the thought that my next one should be permanent.

Hey Arb, Nice looking trade. 2 quick questions, if you don't mind. First, assuming your expected move down isn't imminent, how about converting to a 2:5:3 long fly once the 9400's can be bought for peanuts? The profit range would be virtually unchanged with downside risk nearly eliminated...

I'm no afficionado of the stuff myself, but I did note that the Dow Theory newsletter guy, who correctly called the bottom in 10/02, said last week that the DJIA had confirmed the transports to signal the end of the recent bull move.

Perhaps, but that's only because your perspective is a bit truncated. I suggest you go back and review your American history. "Dirty" campaigns have been a staple of our electoral politics since the days of the Founding Fathers. Indeed, the 1828 campaign in which John Quincy Adams was referred...

Perhaps he meant fancy? Fanciful? Farcical? Ferklempt?

(1) McMillan's "Options as a Strategic Investment" (2) Natenberg's "Option Volatility and Pricing" Good luck.

I already regret the $100k or so I spent on it. And that doesn't include the many thousands I've lost since from fruitlessly trying to apply what I learned in B-school to trading. Plus, the chicks were highly disappointing.

Uh, thanks, but I'm in them since Wednesday. Implieds are up nearly 100 bps from when I bought them (though they're still low on a relative basis), and I'm showing an open 25% profit so far. Now if treasuries actually start to sell off over the coming weeks, these might actually get interesting.

I wonder why this site seems to attract such a preponderence of lunatics and shut-ins. I'd say more, but I have to run as I'm expected back on the Planet Earth. No doubt, however, you'll be scribing another extremely witty and insightful missive as soon as your computer privileges are restored...

Perhaps the stupidest post of the year to date. Kudos.

Absolutely horrific and raises all sorts of fears again about whether the same could happen here. In terms of cold blooded market analysis, while this may increase the risk premium, it should also lead to another flight to the safety of U.S. treasuries, thereby further reducing the cost of...

Thanks, Wee. Interesting idea on using FNM/FRE. I'll definitely check it out.

Wee, perhaps, but as a rule, I don't do futures. Also, the overbought condition to which I referred applies to the long end of the yield curve, generally. That's why, as you may have noticed, the TLT correlates pretty well with the 10-year. Thus, the TLT should be an appropriate vehicle for...

Might be an interesting way to play a correction of the overbought condition in the 10-year (assuming you read it that way). Implieds are low across the board. Then again, so's the open interest (though it's not as anemic as with the TNX). Hence, be prepared to pay up a bit for the privilege...

Please refrain from taking Riskarb's name in vain.