Are options inherently a short-term trade?

[nooby_mcnoob]

What type of positions are you putting these stops on? Options, Stock, Futures?

Everything.

 

[drcruz]

I follow Ron Bertino of Trading Dominion and I've tweaked his base trade to where I enter a position from 90 to 180 DTE. It back tests well

 

[Wheezooo]

I follow Ron Bertino of Trading Dominion and I've tweaked his base trade to where I enter a position from 90 to 180 DTE. It back tests well

He must be good. In all my career I never met someone who has created their own original hedge strategy out of existing vanilla option contracts.

and...

"Ron designed as a downside hedge to a trader’s at-the-money market neutral options strategies."

Hedges against strategies that are market neutral... priceless.

 

[.sigma]

Everything.

So you put stops on debit spreads? Can you give me an example please?

Cheers!

 

[ironchef]

"Ron designed as a downside hedge to a trader’s at-the-money market neutral options strategies."

Hedges against strategies that are market neutral... priceless.

Nothing wrong, he hedges against his market neutral options strategies, just in case they don't work.

 

[nooby_mcnoob]

So you put stops on debit spreads? Can you give me an example please?

Cheers!

Ah, no. The stop is already inherent in the spread.

 

[drcruz]

He must be good. In all my career I never met someone who has created their own original hedge strategy out of existing vanilla option contracts.

and...

"Ron designed as a downside hedge to a trader’s at-the-money market neutral options strategies."

Hedges against strategies that are market neutral... priceless.

Why is this priceless? And BTW it's true. If you're controlling the T-0 line why is this not true?

 

[ajensen]

Looking at option contracts... they die one day. And the structure of the contract makes time of the essence and loses theta daily (and becomes non-linear closer to exp).

So my question is, is it possible, do any of you trade options in a longer-term timeframe? I'm talking more than 45DTE and even wondering if trading 6 month/1 year until exp contract and make a significant return that compensates for all the small-time framed trades you would've done? So instead of trading 100 times a month just put on a few trades, up the position sizing if needed and sit back for the longer term? Does anyone do anything similar to this?

Buying or selling a 1-month option is inherently a short-term trade, but a regularly selling 1-month ATM straddles on the S&P 500 to harvest the volatility risk premium could be considered a long-term investment strategy. I am not saying it is a good or bad strategy.

The long term is just the sum of short terms.

 

[.sigma]

Ah, no. The stop is already inherent in the spread.

You said you put stops on everything, including debit spreads? Maybe I misinterpreted your post.

 

[.sigma]

Buying or selling a 1-month option is inherently a short-term trade, but a regularly selling 1-month ATM straddles on the S&P 500 to harvest the volatility risk premium could be considered a long-term investment strategy. I am not saying it is a good or bad strategy.

The long term is just the sum of short terms.

I agree but I'm not talking about selling 1-month ATM Straddles. I'm talking about buying/selling far out in the term structure, maybe 6 months to a year out.