1x2 put spread strategy

Quote from Maverick74:

It's ticks, not points. The 118 put is 18 ticks and the 117 put is 9 ticks. Each tick is $31.25. And yes the position will be slightly long delta to start and will get much longer on the way down. There are 32 ticks to a handle. So 32 times 31.25 is $1000 per handle or point.
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Dude, there are 64 ticks per option handle - futures are quoted in 32nds, options in64ths
 
Quote from stevenpaul:

but it started out as a chance to hate on CNBC and the know it alls who throw around the ratio term. Who can blame me for that?
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i'm all over hating on CNBC. i must tell the tv to STFU multiple times a day.
 
Quote from ramaTrade:

Also the price you mentioned does not make senses. IV between 118 and 117 puts cannot be that off.
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Hahaha, famous last words, these...

Many things are possible with put (payer) skew in US rates.
 
depending on the deltas this is a short volga position and is dangerous. if IV moves dramatically (in either direction) it can get ugly. you are short options Speed (Dgamma) which is bad. making a habit of this is not a good idea
 
Quote from rosy2:

you might not see it in a book but you hear it all the time from guys shopping orders
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thats the truth... everyone who trades them calls 'em 1x2s
 
Quote from nSa:

depending on the deltas this is a short volga position and is dangerous. if IV moves dramatically (in either direction) it can get ugly. you are short options Speed (Dgamma) which is bad. making a habit of this is not a good idea
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indeed, seen a few guys get banged up on wti 1x2's past coupe months... banks were selling the rich put skew hard
 
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