Alice in Optionsland

[zdreg]

"Alice in Optionland"

It is definitely in the running this year for best title of a thread.

 

[qlai]

you went from a trade where your primary desired risk was direction to a trade where your primary risk is forward volatility.

I guess I did But if I would say : “Based on my extensive research and back testing(not true), my model is indicating that TSLA will spend 30 days consolidating here followed by retest of low-to-mid 900s” that wouldn’t sound too far fetched would it?

 

[qlai]

It is definitely in the running this year for best title of a thread.

You know where that comes from?

 

[newwurldmn]

I guess I did But if I would say : “Based on my extensive research and back testing(not true), my model is indicating that TSLA will spend 30 days consolidating here followed by retest of low-to-mid 900s” that wouldn’t sound too far fetched would it?

I would ask “why were you trying to buy 25 day puts then? Are you allergic to money?”

 

[newwurldmn]

You know where that comes from?

I thought at first maybe you took that from one of my earlier posts, but then I realized that I don’t backtest.

 

[qlai]

I would ask “why were you trying to buy 25 day puts then? Are you allergic to money?”

You mean why I originally wanted to play the drop with 30DTE long put? I wanted to buy some time in case TSLA drifts higher for a few days. Why else pay for time unless you think it will give you some choices to adjust the position? In other words I didn’t want it to be a pure gamma play where if I am wrong, I loose all the premium in a week. But there’s a good chance I am allergic to money lol.

 

[qlai]

I thought at first maybe you took that from one of my earlier posts,

Sorry man, you are not Netflix status just yet

 

[taowave]

If you truly believe that,double up with a spread that reflects your belief

I guess I did But if I would say : “Based on my extensive research and back testing(not true), my model is indicating that TSLA will spend 30 days consolidating here followed by retest of low-to-mid 900s” that wouldn’t sound too far fetched would it?

 

[qlai]

If you truly believe that,double up with a spread that reflects your belief

What spread would you use if you had that belief?

I don’t have any firm believes. TSLA can do anything. But it does have a lot of volatility in it to be able to profit no matter what it does if you are nimble enough. Am I nimble enough? Probably not.

@taowave and @newwurldmn, let’s say you were handed the spread I have on and were told that you must work out of it, what would you do? Would you morph it into something else? Saying “I would close it and move on” would be considered a cop-out, lol.

 

[newwurldmn]

What spread would you use if you had that belief?

I don’t have any firm believes. TSLA can do anything. But it does have a lot of volatility in it to be able to profit no matter what it does if you are nimble enough. Am I nimble enough? Probably not.

@taowave and @newwurldmn, let’s say you were handed the spread I have on and were told that you must work out of it, what would you do? Would you morph it into something else? Saying “I would close it and move on” would be considered a cop-out, lol.

i would do some kind of trade that's similar but only if the vol levels showed an edge. At 40 vols, i'm not sure it does (13% selloff in 30 days, vs 40 vol (which is approx 10% implied move).

if i was given a position like this, i would close it and move on. There's no cop-out in closing a trade that you don't believe in or wasn't your intent. It's really hard to make money. It's not a good idea to piss it away for ego.