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options trading is far from easy in fact one of the hardest bec of all the greeks intermingling w / each other- BUT once understood makes trading more interesting for you can predict only some elements of price action (direction, magnitude, distribution,etc) and tilt the odds towards profitable...

lylec I agree with you that beginners should read, experiment and figure out what works best for themselves. It is a far better approach than laying out hundreds if not thousands of $$ in these courses. I have actually seen courses > $4000 for options 101 stuff. 'tis also true that you can...

KISS is fine and dandy but took a really quick look at iv of SHLD and it is 100% from 60% and will undoubtedly creep up more leading into earnings so a put purchase pre earnings unless it is really deep itm (> 90 Delta) will have juice in it which will get crushed post E/D... I have been...

any options traders there? what brokers do u guys use for options?

I would go with an ATM put vertical to negate vega and theta and make it stricly a delta play. Please pay attention to the spreads. If the spread market is wide, I would reconsider and stick to liquid names. Spreads on stock that cheap will eat up most of your potential profits. Implieds will...

IF spy goes thru the moon, you will be assigned the 238 and your long 240 will be auto-exercised so you pnl will show $-2000 stock loss BUT you got $1220 in credit making your loss $780...

Your best bet for backtesting option strategies is to open an account with TOSwim and use their ticker by ticker on-demand feature. You would load ticker 1, and use the FF/rew button and do what-if analysis.. then you move on to the next ticker. As far as avoiding consultants because you are a...

Hi. Rnd-004 just published. Kindly check it out at www.edgeAnalytix.net. Rnd-004 covers a discussion of 2rd order greek- Charm- must see for backspreaders and short put vertical hedgers. This issue also covers a backtest study of buying 1 ATM QQQ straddle every day (max of 3 per expiration...

drMark27.. Put that criteria (selling 1 contract every day) to a backtest first, then add whatever filters you have on the same strategy (ie selling puts). Taking that first step is a good way to establish a baseline of whatever strategy you are trying to implement. After that, start adding...

Hi. As a new vendor here at EliteTrader, I am pleased to announce the release of 3 new research reports available on a streaming basis at www.edgeAnalytix.net. I invite you to take advantage of an introductory sale of 20% to the first 20 ET members. These reports cover topics such as option...

Steve- a good backtesting platform should include position sizing parameters. They are not mutually exclusive. Here is a link to the system I use...different ways to backtest.. http://www.amibroker.com/kb/2014/10/12/position-sizing-based-on-risk/

yep..I am sure there a some peeps out here who has made a science out of this whole thing.. (ie knowing how many times past years stock has over/undershot the estimate,and consequently the straddle cost, etc) ... you gotta really know your stocks since in some cases, the vols are so high that it...

Jeff Augen has a piece on that type of trading.. look him up. you just gave me an idea of a backtest for my "store" ..lol . but I gotta key in these companies manually on a watch list for backtesting an ATM straddle purchase held for 5 days since my system does not scan for fundamental data...

Without delving into higher math (which is not my strong point)...intuitively it kinda makes sense.. If the vols are so high, every OTM strike has a greater chance of being ATM so the vegas reflect that. A QQQ May132p with QQQ at 138 has .02 vega at 10% IV/ at 80% IV vega jumps to 12

not quite. you mentioned selling front calls in rallies and buying back calls into dips which led me to believe that you are legging into time spreads. I speculated that the starting position would be a call backspread in the back month since I assume you want to start delta flat although you'd...

Interesting tidbit a couple of posts back from you about legging into a time spread. Maybe start w a call backspread in the backmonth and then on rallies substitute the short back month call w front month calls? then do it in a ratio so after x days, you end up with a classic time spread? hmm.

sle.. thanks for sharing... just wondering why you are putting a 21 day floor?

I am totally confused too.. lol.. gamma rent to figure out daily b'even should have theta in there ... I also think the base time should be 365 not 30... aghh my head hurts.. gotta look at my notes way back on these "special " calculations.

BallsofGold and SLE excellent posts! I need some clarification though... 1st question.. kindly define ABS? 2nd question- I am confused with the daily breakeven value? When I looked at it it sounded like "gamma rent" ? - which should involve theta.. so kindly explain the "$9.5 breakeven" vs the...

M.St. Why so angry?