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If we believe the option pricing models there is no inherent benefit to buying an option versus selling an option. If there was, the edge afforded buying versus selling would be exploited until it was no longer present. Options are tools that allow you to model a desirable risk and reward...

Take it from another dad, you won't miss the sleep. Well, you will but it you don't really. Enjoy the experience! Congratulations!

These are actually pretty interesting trades. If you have access to a decent options analysis program you can change the implied volatility levels and see how that changes the risk graph. -Chris

Your break evens will change with a change in IV. Double diagonals are rather sensitive to the effects of implied volatility. An increase in IV will boost the value of your long options, while theta erodes the value of your short contracts. That's the good news. The more problematic...

cdowis, How do you plan to deal with a drop in IV? -Chris

Andy, I'm not sure I'd agree with your statement. When implied volatility is low, option prices are relatively inexpensive. All other things being equal, you want to be a net buyer of option premium. If IV rises, and all else remains constant, you will see an increase in the value of the...

Limiting your losses is where the money, long term, is made.

I echo the coach's comments on this. I also closed out my June put spread for a loss, because it triggered my stop at 1,230 and my trading plan required that it be closed. You have to look at it as a successful implementation of a trading plan. If you are trading a sound plan, it will be...

It looked like we were going to have a nice flat day. I walked away from the computer and the market fell off the edge. The only green I see on the quote screen is the VIX. :eek:

Yeah, today was a real "thumper" and really tests your trading philosopy and mental toughness. If you're still holding May positions I would be cautious about the SET and my personal preference would be to close anything that made me nervous. What was it that Coach said...a knife in the leg or...

You are now five points away... :eek:

Coach, Where does the research start? In other words, assume you recognize a change in market fundamentals (e.g., rising interest rates) and you want to find a fund that will do well in that environment. How to you begin the research to track down that animal? -Chris

Coach, I am very interested in your thoughts about CEF's and would welcome a discussion about selection criteria and other related matters, whether on this forum or elsewhere. Chris

Phil, As requested I'm posting my net results for trading October contracts on the SPX. The details of the month's trading are documented on my site, but the short version is that my final position after adjustments was a 1,155 / 1,140 bull put spread, a 1,145 / 1,130 bull put spread, and a...

Well, I had never done it over two days either. When I realized that I wasn't going to get the order off I sort of stared on the screen for a moment or two, wondering "now what do I do..." :confused: I woke up this morning at 4:30 a.m. PST (7:30 a.m. your time ) to check the futures...

Hey, Phil! Just thought I'd drop in and see what you're doing with this market the last few days. Our brokers are loving us this week! I've been rolling call spreads to lock in profits and today finally triggered an adjustment on the put side. A little ugly on the downside today...

zman... Nice fill! There is quite a bit of support between you and the market. Just keep an eye on things...

You really touched upon the essence of trading here. Coach Phil does such a fabulous job of explaining the basics, getting the essential concept into our heads, and instilling a sense of "doability" into the act of trading. However, you can move beyond those basics and refine you own trading...

I could not agree more with Phil's last statement. In the past, I have traded credit spreads and iron condors on individual stocks. While I often did make money, I also suffered some substantial losses. This included deep OTM credit spreads, which would bring in .20 credit. I would open...

Risk is always what counts. Personally, I don't have a problem with closing the one spread and rolling to the other. My personal preference would be to pay a debit to close that is smaller than the credit received for opening. In other words, I'd want to increase my overall credit. If I am...