Butterfly options

taowave said:
You sure about that???

Think about it..

Check your math:)
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Math checked. Looks like the radix could stand a bit of repainting and a wax job, and the cap-sigma is looking a little bent, but a bit of hammering will soon put that right.

Granted, you could structure what is nominally a debit trade to result in positive theta by selling more extrinsic than you buy. Whether it remains a debit trade after that, or whether that discussion is relevant to the level of the OP's question are not exactly matters of math. :)

(Not saying you're doing this intentionally, but I believe it was Feynman who noted that you can make almost any assertion untrue if you change the scope.)
 
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El OchoCinco said:
It will take exactly the amount of time that passes for the price mark to get above what you paid for it. When that happens mark the time, that is how long it took.
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but lets say im looking now at the delta its 0.49 theta 2.28 vega -25.59 but its expiring in 70 days so from my understanding its not really affecting the position so how can i know when it will turn to + and not minus ?
 
tommcginnis said:
No, you haven't. No, I didn't. Not ever.

But if you're interested, I'll take you on.
You have a small hurdle, in that you must read:
Al Sherbin's option pricing book.
Alex Elder's trading book
Options Made Easy (I think) from Guy Cohen
and have in your possession, his "Bible of Option Strategies"
And also have Brett Steinbarger{?}'s Enhancing Trader Performance nearby.

SO: buy 5 books, each available off of eBay -- maybe $100 total; none demanding of anything beyond high school math. Read three of them {as indicated}. Come with questions.

FWIW, I don't think there's a single question you've EVER posed, that was not answered/illustrated in a page or two from Guy Cohen's "Bible..."
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thanks got one book lets see
 
LOL,No intentions behind my assertion...

Just found it curious that you wrote debit trades works against you not for you..

Last thing the OP needs is to get led in that direction...





BlueWaterSailor said:
Math checked. Looks like the radix could stand a bit of repainting and a wax job, and the cap-sigma is looking a little bent, but a bit of hammering will soon put that right.

Granted, you could structure what is nominally a debit trade to result in positive theta by selling more extrinsic than you buy. Whether it remains a debit trade after that, or whether that discussion is relevant to the level of the OP's question are not exactly matters of math. :)

(Not saying you're doing this intentionally, but I believe it was Feynman who noted that you can make almost any assertion untrue if you change the scope.)
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Assuming the underlying doesnt move,how much would vol have to come in to make $100?? If vol stays unchanged,how many days of Theta do you need to make $100?? IMHO,its good that you are trading 1 lots(i hope),as you will learn the hard way,which is the best way

met1989 said:
but lets say im looking now at the delta its 0.49 theta 2.28 vega -25.59 but its expiring in 70 days so from my understanding its not really affecting the position so how can i know when it will turn to + and not minus ?
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met1989 said:
but lets say im looking now at the delta its 0.49 theta 2.28 vega -25.59 but its expiring in 70 days so from my understanding its not really affecting the position so how can i know when it will turn to + and not minus ?
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Long FLYS generate profit from time decay and/or vol collapse or reduction. The actual value of theta or vega is not the meaningful thing here, it is what is actually happening with the position currently. 70 days to expiration means theta is meaningless as indicated by the low theta value. That is basically nothing.

Vega is meaningful only if you bought the FLY when Vols were relatively high or average and are moving lower. If vols ar enot moving lower the vega number could be anything really and you are not focused on the right number.

Negative vega just means the value goes up when vols go down. If vols are not going down and time to expiration is 70 days you got a lot of time to wait before anything happens and hope the stock stays between the breakeven points.
 
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