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Again,do NOT exercise the put if you buy stock... You are giving away the synthetic call you are long

He's buying stock to cover the put and getting "a free call"...If he catches a put bid above parity,it's one thing,but why give the call away

How much time till expiry? Keep in mind if you buy the stock,you are now synthetically long the call.. If there is time left,do not exercise the put

Im with you,and didn't see his last post..I thought he was playing earnings and didnt realise this was more a. Best way to " catch the 20 vol drop day".

Ignoring Gamma,assuming you are delta neutral,I would keep it simple and look at the Vega ratios between the strategies you are thinking about.. From there it will be pretty obvious that you cant really compare the Vega of one short straddle with one Fly..You would obviously need multiple flys...

are you in the "business" of making money,or in the likelihood of making money "business"?

IC,if you are patient/disciplined you will find that the market may not serve a free lunch,but it definetly offers some ridiculously dirt cheap lunches...Thexqueation is,can you recognize it when presented.. You need to forget about your counter parties IQ..Its meaningless,and it's not you...

Why not trade directionally and incorporate vol should the opportunity present itself.Direction and Vol are not mutually exclusive,nor does trading vol imply one has to be delta neutral. Unlike man,not all delta's are created equally:)

There is no such thing as a "retail trader" any more.. No question deep pockets helps.. The playing field has been leveled... Market makers have the edge assuming order flow,but only if its 2 way flow.. If its one way flow,they better be good at "front running" a lost art:) Forget the info...

Check your Vega vs Theta.. Vol didn't drop 40 handles

You guys are being too kind..OP is asking questions that should be an indicator that he is in way over his head in TSLA...pre earnings no less.. ATR of close to 100 points,Bid ask spread on his 130 option was close to 6%.. Had nothing to do with High IV..He could have neutralized that at a...

You went from. Trading a 3 dollar spread to a 130 dollar call with a 7 dollar bid offer spread?

Judging by your post,I will go out on a limb and say you may not be ready to trade TSLA.. Im assuming you know earnings are coming out on the 22nd,vol is jacked.. The market makers did not drop vol 40 handles on you. First you said you legged a spread,took a small hit,got out and then revenge...

First off,thanks for the thread.Interesting topic.Without having read the paper as of yet,I will say that market cap and industry probably has a greater influence on skew than any fundamental ratio..Obviously capital structure will have an impact,such as onerous debt to equity ratio...

I fully get what you are hoping to capture.. Look at the ratio of the 2 instruments. Back into which strikes you would like to trade if you aren't going to trade the EFT's.. You need to beta adjust/make adjustments for vol.. Any reason why you want to trade options as opposed to the...

How does the absolute vol levels and skew compare between the 2?? What's your guesstimate as to where the ratio goes??

From the little I know of you,that was my impression.Its very difficult to transition from position trader who overlays/hedges with options to "derivatives/vol trader"..

Hi there,when you say high vol,are you talking historic or implied?? Curious to why you choose to buy high vol,and if you have backtested it.. I think "switching" is a big mistake.. Cater to your strengths and comfort level..Eliminate your weaknesses..

Seek and thou shall find take a look at Portfolio 123 thats the answer to your question

Op is talking about getting assigned pre expiration(no mention of div) A most unlikely scenario