Buying/Selling Options

[daddy'sboy]

Ok, I've got an insight I acquired today that someone might want to disagree with, although I think that would be difficult.
I hold the belief (since today) that a collar or a married put has the advantage over the equivalent synthetic call/vertical (bull call spread) in only one significant way. That advantage is that one can gamma scalp the collar/married put much more efficiently than the call/vertical. I'm assuming here that the vertical is only adjusted using options and not stock. If stock were used in the vertical then it would no longer be an 'options only' strategy.
Ok, what do people think?
daddy's boy

 

[exQQQQseme]

Mav, you have a gifted way of expressing yourself here. I found your comments on directional trading to be especially thought provoking. No doubt the views of others on this very important topic would be appreciated and helpful to all.

Bob

 

[ChrisM]

Quote from daddy'sboy:

Ok, I've got an insight I acquired today that someone might want to disagree with, although I think that would be difficult.
I hold the belief (since today) that a collar or a married put has the advantage over the equivalent synthetic call/vertical (bull call spread) in only one significant way. That advantage is that one can gamma scalp the collar/married put much more efficiently than the call/vertical. I'm assuming here that the vertical is only adjusted using options and not stock. If stock were used in the vertical then it would no longer be an 'options only' strategy.
Ok, what do people think?
daddy's boy

If you are effective scalper then using stock against collar/married put gives you nice opportunities. If you are. If you are not however, then option may work for you as "slow motion device". Thus you may not have so many chances to enter the market and not executing trades based on psychology.
To make long story short - IMO depends on who you are.

 

[exQQQQseme]

Chris and others...you're right. This is a tough crowd, as as Mav indicated in a previous posting, there is an adjustment period. However, I don't agree with him and others who tell me that the rough tenor in here enhances one's knowledge over the long run. Maybe time will prove me wrong. We shall see.

Bob

 

[IV_Trader]

Quote from daddy'sboy:

Ok, I've got an insight I acquired today that someone might want to disagree with, although I think that would be difficult.
I hold the belief (since today) that a collar or a married put has the advantage over the equivalent synthetic call/vertical (bull call spread) in only one significant way. That advantage is that one can gamma scalp the collar/married put much more efficiently than the call/vertical. I'm assuming here that the vertical is only adjusted using options and not stock. If stock were used in the vertical then it would no longer be an 'options only' strategy.
Ok, what do people think?
daddy's boy

by scalping verticals via stock , you still be ahead ( margins) , but its all can change in April for retail.

 

[taowave]

Quote from Maverick74:

The problem of course is that every vol trader is making a de facto directional bet whether he knows it or not. And every directional trader is making a vol bet whether he knows it or not. This is where many trader shortcomings are. This is why at the end of the day, I really believe you need to be a decent directional trader.

Mav,you said a mouthful there...

I would argue that long volatility(gamma) traders need to be decent directional traders,and that short volatility(gamma) traders need to be exceedingly disciplined and not take directional bets.

I fully agree that at the end of the day,the best vol traders are also adept directional traders.

 

[RichardRimes]

Quote from optioncoach:

Bob:

My honest advice, do not post any position here at ET. From someone who has done it for almost 2 years in the end it might not be worth it as more people are likely to jump on you before helping (although they see it as helping and ignore their own tone).
"

Hey Coach you are obviously unaware that your thread has now become a "cult" legion. It has been downloaded and re-worked into word format only 570 pgs long :eek:, I've spent the past two days reading/editing the 1st 170. You forget how great a thread it was/is. But you are right...there is a lot of "editing" necessary

-mainly editing out all those really stupid comments from that "DonnaV" person.

 

[exQQQQseme]

Mav, Tao, and others...

What I don't get is the necessity to put the traders in little identity pockets such as Vol Trader, Directional Trader, or Whatever Trader. To me that is tantamount to formulating an opinion of someone's behavior based on one's Zodiac sign.

I have shared with the group here that my present open AAPL positions are:

a) Short 800 shares of stock
b) Long 8 Jul $95C


I have also shared the fact that this is the net result of something I started just before Thanksgiving and is where I now presently stand, after different adjustments between then and now. I have also said this combined position now has a net of about 340 negative deltas. I have also disclosed the fact that this Corporation is scheduled to announce December 2006 quarterly earnings on Wednesday after the market closes.

In another thread I discussed the fact that I was contemplating purchasing some of the Jul $120C's, principally to reduce my net negative deltas as partial protection against an upsurge in the event of a very bullish announcement. In this regard I have also academiclly laid out how the July $120C purchase could potentially be turned into a very low net debit butterfly should the stock go up after my initial purchase of the Jul 120C's.

What I don't understand is how this objective contemplation of the available alternatives can somehow enable people who don't really even know me, to be able to categorize me as one type of trader or another.

Bob

 

[dagnyt]

Quote from exQQQQseme:

[B...What I don't understand is how this objective contemplation of the available alternatives can somehow enable people who don't really even know me, to be able to categorize me as one type of trader or another.

Bob [/B]

No one has categorized you (or anyone else).

Mav was expressing his opinion that to be a successful trader, one must be good at either picking direction or timing implied volatilities.

Period. His opinion. Not directed at you.

Mark

 

[exQQQQseme]

Wow, this really is a tough leage to play in. Mav knows my comments were not taken personal nor were they directed at anyone in particular. I was merely trying to divert the attention from the person posting to the nature of the posting.

No way I'm ever going to win here. But, at least it's interesting.

Bob