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That's titillating but the piece de resistance is holding short stock (of value) on a company that announces bankruptcy. :)

The best option strategy is the one that makes money! :)

There are a gazillion theories on what will make money in the market. The trick is to find one that works well for awhile :)

Augen wrote an article for last May's SFO Magazine about an IV pattern on expiration day for stocks over $50 with large open interest, He stated that barring major news, IV tends to increase until 11 AM, drops toward noon, levels off for 2+ hours and then drops sharply into the close. He...

290 call ha s higher delta. Roll should be made at higher stock price.

That's one reason. Another is that unless one goes out a lot more than a month on the short leg, the risk always exceeds the reward and the reward is only achieved if the underlying moves dramatically away from the strike before the near month expires. Not good odds. I have used them...

There are tradeoffs with every strategy. You could put on much bigger positions with options, have a fixed max risk and make a bundle. But in order to do so, you're going to have to be right not only about the direction but in a specific time frame. Don't knock small gains. You'd be...

And even if you knew whether the puts and calls were long or short, for example, how would you know if someone was buying puts because they were bearish or buying them to hedge a long position in the underlying (throwaway money)?

NEED is the wrong word. People should utilize strategies that fit their abilities as well as their risk tolerance. If one could identify and catch big moves, spreads would not be a good choice.

Yep, if DVN goes to 65 in 2-3 weeks, you'll make money. But suppose the stock drops to 70 in 3 weeks. I bet your gain is no more than a point... while the stock droped 3x that. Why is it difficult to make money buying options? First, they decay at an increasing rate. Every day they...

Expanding a bt on what Mark wrote, suppose something spooks the market and within the first week the SPX drops 1/4 of the way to your short strike and IV expands a bit. Maybe you have $200-300 loss per condor, 2-3g per 10 IC's... and how much if your full 150 K is the pot? Now, maybe you...

Of course there's a correlation because all (most?) of the DOW stocks are in the SPX. Since the sample size of the DOW is smaller, it will tend to be more volatile. But as someone else pointed out, it's irrelevant and that's because the P&L of your position is based on the SPX and its options...

LOL. Well if that's the case then CSI is probabably not a reliable source anymore :)

You'd have to provide an example of that for us to be on the same page but my guess is that if you use the same strikes but flip the ITM from put to call (or vice versa), you'll have the same risk profile and possibly have to deal with fewer commissions at expiration. Where a double diagonal...

If you start collecting data now, in 5 years you'll have exactly what you need :) Seriously, I doubt if you're going to find historical intraday data and if so, it's probably going to be costly. But what do I know? CSI Data has been around for a long time and I've heard that their data...

Thanks for posting your example. Does a 25:15 ratio mean 25 put and 15 call butterflies? If I could get a DWB for a credit with an extra kicker on either side, I'd be a lot happier with the risk profile. That would mean one extra long strangle on the outside wings, eg. 11/-20/10p and...

Some people consider both horizontal time spreads and diagonal time spreads to be calendar spreads while others consider further differentiate them into calendars and diagonals. Now I see why I was disagreeing with your previous P&L projection (I consider a collar to be different stikes and...

Walt, I'm familiar with them. I've used ratioed double calendar strangles and double reverse calendar straddles/strangles for earnings announcements where there was a month to month skew situation. spin

sonoma, Thanks for the clarification. I get what your saying... tho not via volatility, I've built larger verticals, calendar strangles, etc. by incrementally adding to each side as price zig zagged. spin

If the total position is a combination of short strangles and and protective backspreads, how can one add one component when vol. is high and the other when low and end uop with the composite position? I have no problem with legging in but that's what you're suggesting but that doesn't always...