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OC,you are scrambling:) You keep on bringing up IV and Flys and are off on your assumption Not all Flys go up when IV decreases. If you buy an far OTM fly,it will be cheaper if IV is lower. Doesnt make sense to add direction/delta to the equation to support your IV argument. Are you also...

We talked about this before. What you are stating is true for ATM flys and their neighbors Its not true for OTM flys..The relationship starts to invert Far OTM Flys are long vega.. Think abut it..If you are long an ATM fly you would love for the stock to do absolutely nothing and sit there...

I think you know how to trade off Vol,you just dont know it...:) This is why its best to break things down to its simplest components.. You must have an idea of what cheap vs rich is on flys or verticals.. You can do it by simple probability/risk reward analysis,or you can do it by the...

There is no real economic benefit in the sense that the markets are so highly liquid and efficient.No one is going to come to you and sell a vertical 10 percent cheap to fair value... Flys.condors,split strikes are all priced within pennies relative to one another.. And if you do get "edge" in...

Its really not terribly helpful other than to get a slightly better understanding of Flys vs condors.. When I traded on the exchange floor and didnt have delta sheets/Greeks,I had to come up with home brewed formulas to help me make markets.. I actually traded condors/ verticals in decent size...

If you want to make it in this business you have to put some real effort in.. https://www.valuepenguin.com/investing/understanding-intrinsic-value-time-value

I would have to say I am a contrarian that believes in mean reversion.. Right now I am short the skew(ratioed)in AAPL on the upside and running short deltas,despite being moderately bullish. I believe 105%-108% of spot options are priced too high,and wont delta hedge my short deltas..Post...

I switched over from IB to TOS due the the zero commissions at TOS.While the TOS system works for me,I have noticed from day one that the TOS execution capabilities on option spreads is inferior to IB. My biggest concern was fast moving markets and having no clue as to the spread markets and...

Maybe this will help a bit.. Condors,Flys and Iron are brothers from the same mother..They are closely related and almost identical.. Example.. 100 stock Short the 95-90 put spread Short the 105-110 call spread Difference between short strikes is 10 points and width of verticaI is 5 points...

I often trade Condors,Flys,Calenders and to a lesser degree ratios without paying much attention to the delta's. Right or wrong,I have a view on the stock and where the option spreads should be priced based on my assumptions. Currently,I believe AAPL upside vol skew is too steep in some...

Funny you should ask that as I really dont look at the individual short leg delta's.. I look at percent of spot and the net delta of the spreads.

Yes,the high implied vols are the determining factor.If you have an option calculator,you will see that vol would have to be super jacked for the spreads to trade at that level.. The more screen time you have,the easier it will be to pick out spreads and intuitively know how they are priced..

In the example I gave you,vol was super jacked, which is why you could collect 4.25... You would have a very very difficult time losing money on spreads/condors trading at those levels.. For the record,I was talking index options...

Hypothetical example... 100 dollar stock. 105-110 call spread trades at 2.25 95-90 put spread trades at 2.00 Sell both spreads for 4.25 Risk .75 to make 4.25 Another way to look at it is 3 five point Butterfly stacked on top of one another for a .75 debit.. That's .25 per fly.Ill take that...

But here is the problem..If you arent Delta Hedging,every position has an implied directional bet.If you absolutely suck,you are in medium to deep doo doo.... With that said,there are "seemingly" opportunistic trades that present itself which afford one the luxury of being somewhat clueless as...

Im a little confused as to why Earnings yield is a better measure than P/E. Are you saying if I run a backtest with an Earnings yield filter greater than 10 vs P/E less than 10,I will get different results??

Believe it or not,you get used to it pretty quickly. They do make up for it with other features..

IB shows the bid offer spread and size of the spreads.. TOS only reflects the theoretical market if one were to take an offer and hit a bid. If you split the market your /bid/offer is shown at IB,even if I enter the spread on TOS.. Its not refected on TOS..I think IB's execution capabilities...

I have already left IB for TOS,but you better make sure you can deal with the manner in which TOS executes option spreads before jumping ship.

You havent truly expeienced the "joy" of options until you lift a leg on a spread while the other decides to sprint away from you..Nothing quite like white knucle trading