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remember... it's european style shorts... not american style... He's absolutely SAFE...

Good luck to you Neke... needless to say, your style will experience material set-backs on occasion. However, your windfalls seems to offset it tremendously. I guess with the rose petals come the thorns. You are an inspiration. Although I doubt that I'll ever have the psychological...

Neke, How far otm do typically go when you enter your option positions? I assume that you'll go at least 4 or 5 strikes away from atm with a front month expiration, and hold on to the position for a day or so... Is that correct? thanks, Walt

Hi gkishot, I have a different understanding with respect to expectancy. If the positions are established otm with indices traded under the european style, then the IC will have a positive expectancy and the reverse IC will have a negative expectancy. However, if the positions are...

Am I wrong in my understanding that debit spreads are the best ways to neutralize IV, even if you're slightly short vega. However, even if I'm short vega with a "reverse" IC, I'll be able to offset it by being long delta & long gamma. Of course, I'm then short theta. Wouldn't it be a wash...

Now, with OTM IC, it pays less, but has a higher probability of success. However, OTM Reverse IC pays more, but has a higher probability of failure.

ATM IC pays more, but has a high probability of failure. Whereas ATM Reverse IC pays less, but has a high probability of success. Walt

Hi Mark, A high probability of success with a reverse iron condor means a high probability of failure with an iron condor, and visa versa... Walt

Thanks for the link Mike... However, I'm more afraid of establishing my positions otm, as indicated by the options guide. Although it gives a favorable risk:reward ratio, the lower probability of success factor makes it a high risk trade in my opinion. Personally, I prefer to have a more...

Hi Mark, I'm sorry, but when I stated spread, I meant strike price. In a nutshell, my limit orders cannot exceed 80% of the potential max profit. Therefore, as you mentioned above, if the strike price between the long & short leg is $5, then I cannot pay more than $4 in total to establish...

I'm sorry, but I wasn't referring to condors when I was using the term "reverse" iron condor, as introduced by Mike. Perhaps mike was referencing a condor, but I thought that he meant a simultaneous call debit spread and put debit spread. Mike, When you mentioned "reverse" iron condor...

Thanks Mike... what's your win/loss rate with them? Have you been doing it more than a year? Walt

As a rule of thumb, I try to establish the "reverse" iron condor (i.e. bull call spread & bear put spread) with a 4:1 risk/reward ratio. In other words, for every $5 spread between the debit & credit legs, I try to pay no more than $2 for them. Therefore, $2 on each side will have a total cost...

I've been contemplating this strategy as well. As a matter of fact, I tried to incorporate it into a thread I strated last week. However, there wasn't much discussion on it. Mike, How long have you been doing this... "reverse" iron condor? Do you establish them as a strangle or...

How about John Arnold of Centaurus... He has a documented record of 100%+ - 200%+ each year over the last 5 years. Perhaps he's more the exception than the rule... Walt

thanks Mark... that cleared it up alot...

Perhaps the best way to mitigate the risk of early assignment & to reduce the impact of slippage is to set up the bull call spread and the bear put spread with the long legs atm and the short legs 2 strikes away (instead of only 1 strike price away). Instead of a max 20% return, it would be a...

Thanks for the feedback Mark, I meant "assign" by the broker, not exercise. I guess ultimately, I'm concerned about early assignment before expiaration. My debit spread won't reach its full potential until expiration; however, if both legs are itm prior to expiration, althought it's a debit...

The 10% gain may be modest, but I don't know of a higher probability play with better returns. Is there a better way to play earnings probability? If I was more strict with my orders, I would be able to make 20% max gain. That's a pretty solid return for one month.

jw, I'm perplexed at how you derived a net credit of $6 for the diagonal credit spread. As I am currently viewing the spread, the Nov795P = 11.25[$562.50] & the Dec700P = 10.25[$512.5]. Unless I'm missing something, I don't think it's a favorable r:r ratio. thanks, Walt