atticus' single-name delta book

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I am trying to learn more about how to trade fly from this journal. But I do need some guidance in terms of picking the right underlying and entry points? Are you guys picking the fly trades for weekly options based on

(1) directional view that the stock will move to the middle strike (body) of the fly, and then we take the profits when the underlying is getting near the body? or

(2) negative volatility view, i.e. enter the "Fly" when IV is high and exit when the IV turned down? or

(3) expectation that the stock will stay flat for a while and we take profit after time decay? or

(4) views on volatility skew that the IV of body strike will go down and the IV of wing strikes will go up?

Appreciate you will shed some lights for people like me without much clue yet but really want to learn.
 
Quote from TigerBalm:

Thanks for all your posts. I learned a lot from your journals (exotics, pitchfork, etc;) and you set the bar. If it weren't for you, I (and many others on ET) wouldn't have even know what is possible. I must add that your knowledge of health, supplements and other medical issues was/is as impressive as your vol! :-)

From a philosophical perspective, why do you even need to do that fund now? Now that you have earned your wealth, wouldn't it be better to devote more time to other interests, or just be silent more, every day? I think that most people have to slave it and report to the man each day, and have no opportunity to enjoy quiet moments. For people in your position who can afford to not "work hard", I think it's important to ask yourself, "Am I afraid of silence? Am I just running because that is what I am used to?".
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I run two households and one of my kids has taken an interest in maths and trading. I'd like to move entirely out of listed and trade (mostly) OTC. I agree with much of what you state and it's why I've decided to limit my posts to replies.

Thanks.
 
Quote from Alpine:

I am trying to learn more about how to trade fly from this journal. But I do need some guidance in terms of picking the right underlying and entry points? Are you guys picking the fly trades for weekly options based on

(1) directional view that the stock will move to the middle strike (body) of the fly, and then we take the profits when the underlying is getting near the body? or

(2) negative volatility view, i.e. enter the "Fly" when IV is high and exit when the IV turned down? or

(3) expectation that the stock will stay flat for a while and we take profit after time decay? or

(4) views on volatility skew that the IV of body strike will go down and the IV of wing strikes will go up?

Appreciate you will shed some lights for people like me without much clue yet but really want to learn.
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Those weekly specs are almost entirely a price-bet (on touching neutrality). I rarely rate the vols on the weekly as synthetic vol impact (passage of time). You can sell vol at 35 and see the line go to 40 and still earn on the deltas. You're essentially paying for the convexity (or concavity on multiple moments) to the neutral strike.
 
I am not sure if this is the right place to post option ideas. If not, tell
me where to post.

I did not find any butterflies I like this week. Gold futures May 1450/1400/1350
that expires next Thursday is working, but it touched the mid point too early.

I think IV's can easily go up in the current crazy market so I did not find
any butterflies. I am in the process of trying to be able to use Excel 2013 so
I can install some add ons. I would like to buy Excel 2010 but it does not
seem to be available. Therefore I need flys where I think the share price will
drift toward some value and IV will come down.

My normal CRM butterfly is wrecked because CRM split 4 for 1. I think the
split might be a way of lowering real share price so that it does not effect
the constant issuing new shares marketing system.

I am trying the May 40/37.50, 2 to 1 back spread at a 9 cent credit.
Earning are projected for May 9. Options expire May 17. I may be too
early but I think CRM could easily fall on anticipation of bad earning
in a weak market.

I do not understand calendars. Does anyone have suggestions for CRM calendars
into earnings?
 
Quote from vanv0029:

I am not sure if this is the right place to post option ideas. If not, tell
me where to post.

I did not find any butterflies I like this week. Gold futures May 1450/1400/1350
that expires next Thursday is working, but it touched the mid point too early.

I think IV's can easily go up in the current crazy market so I did not find
any butterflies. I am in the process of trying to be able to use Excel 2013 so
I can install some add ons. I would like to buy Excel 2010 but it does not
seem to be available. Therefore I need flys where I think the share price will
drift toward some value and IV will come down.

My normal CRM butterfly is wrecked because CRM split 4 for 1. I think the
split might be a way of lowering real share price so that it does not effect
the constant issuing new shares marketing system.

I am trying the May 40/37.50, 2 to 1 back spread at a 9 cent credit.
Earning are projected for May 9. Options expire May 17. I may be too
early but I think CRM could easily fall on anticipation of bad earning
in a weak market.

I do not understand calendars. Does anyone have suggestions for CRM calendars
into earnings?
More...

Too early? The GC fly hit a 50% gain in two days (from 10 to 15). I am no longer quoting it but IIRC it closed near 20 today (a double)? And it didn't cost you 2+20. I guess you can't please some people.
 
Quote from atticus:

Too early? The GC fly hit a 50% gain in two days (from 10 to 15). I am no longer quoting it but IIRC it closed near 20 today (a double)? And it didn't cost you 2+20. I guess you can't please some people.
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that was a great call by you.. i was in at 15 and out at 20... thanks
 
Hey Atticus just to echo the others, thank you for the info you have put on ET. I have learned a lot from reading. Good luck in your new venture!
 
Quote from atticus:

I got some backers that want to start a fund, something that I've avoided doing as it's far less of a headache running sub-accounts at funds. Anyway, it's an old friend from the CBOE and some EU inst. monies. Access to exotics on a larger scale.

I'll update the Gold position and then I'll be gone. I won't be able to post positions, but I'll check my PMs daily. I may come back from time to time to shoot the sh*t.
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Best of luck, and thanks for everything.
 
Haven't funded yet so I thought I would add this one (perhaps last); long the VXX May10 17/19.5/22 fly from 0.98 risk (0.97 mid). Looking for 1.30 by Friday's close and 1.70 next week.

Edit: I paid 0.99 risk.
 
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