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HAHAHA, this is too funny!:D The OP meant the currency trader you worked for!

By that I meant that you're not exposed to IV. You can dissect it any way you like, it still nets a synthetic long.

Nope, it's a synthetic long at any strike.

Delta is a measure of how much an option moves given a $1 change in the price of the underlying, not some other stock or index. You cannot say that if a call option on IBM has a Delta of 0.5 then a 1 point change in the SPX will mean a 0.5 point change in the price of the IBM call.

Yeah, beta-weighting other greeks doesn't really add much value, but I thought I'd just mention it as it is possible.

The benefit of beta weighting is that when you have a number of positions across various underlyings you cannot just add up the greeks to see your exposure to the overall market moves. So beta weighting is a way of bringing all positions to the common denominator. Btw, you can beta-weight...

You can beta-weight other greeks as well.

I'd have to disagree on that. Sure the stock price will drop by the amount of the dividend on ex-date, but due to other market factors the combined effect may be more or less than the dividend.

It's the same principle as it is with stocks, when companies pay dividends their stock price goes down by the amount of the dividend (holding everything else constant).

Index options use risk-free interest rate, such as fed funds, and the dividend yield (not sure where you can find the dividend yield for various indices, though, as I get it directly in my platform). FX options use the risk free rates of the two currencies. E.g. if you have an option on EUR...

Tell him you wanna see his trackrecord for inspiration.:D

Volatility was 300% so that's 3/16... not 0.3/16... Also, you need to take the number of days to expiry not to the event.

Making trades is not an exact science, so to speak, so there's no single best trade that works in this situation. It's always a bet. And, no, the volatility wasn't so high as to make it dangerous. Options are priced proportionately so you get compensated for the greater risk. As I mentioned...

A straddle doesn't always work. When you buy a straddle you bet that the realized volatility will be higher than implied so if the market overpices the straddle and you overpay then you'd be lucky to breakeven. For example, the stock moved about $10, while the straddle was trading at about $9 a...

spreadn00b, got a good point. If the correction does come then IV will rise, which means that your short calls won't be making as much money as you like. IV is really low right now, just buy a put or sell a call vertical to at least partially hedge your vega.

Unless, it involves shorting the back month, in which case you are considered "naked".

Oh ok, didn't notice that. Thanks!

What's the problem with flys in a retail account?:confused:

Well, in the intial post the OP didn't mention that the broker has already fixed this once and the problem has reappeared. It seems that usually, the first thing people do is rush to post here rather than contacting their broker, which, obviously, is not the case here.

If you are 100% certain that this is not your position then don't touch it! Don't do anything, don't try to cancel a stop order. Just contact your broker and get it fixed. Obviously, your broker is having some glitch.