Calendar Spread Basic Setup Question

[TheDawn]

View attachment 300425


Press the button

Good idea. I will do that.

 

[taowave]

You were done way before you started.

Is English your second language??

I used very basic option terms..

Vol,DTE,Interest,Strike,Price...

You have only proved that you are too lazy to spend 5 seconds testing your theories with an option calculator...

You are unteachable,and will never succeed at trading

OMG!!! It's so complicated with all those "Vol", "DTE"!!! KISS!! LOL What happened to that? See, when I keep it simple, you bombard me with all these technical terms and jargons but when I try to explain to you with mathematics and my theories, you tell me to KISS. LOL

Whatever you just want to win. Fine, you win, infinite gamma does not exist. There, you happy? LOL

Anyway I have done everything to prove that a phenomenon of "infinite gamma" does exist and I don't think it can be explained by the conventional option pricing model with regards to vol. And I have always said that it's the extreme increase in vol. that could actually drive gamma to infinity.

I am done here.

 

[taowave]

I punt cheap calanders pre earnings,or really short term SPY,but have not found that Vega works in my favor.Could be due to placing upside bets,and the bsck vol always appears to get munched if I am lucky and the stock rallies..

I'm looking at short term vol vs long term vol at different HV and tend to agree with your assessment...

Firstly, spare me the condescending tone.

Secondly, when buying a cal, sure there is gamma risk, but the theta and vega are working in the traders favour.
With your proposal of selling a cal, the gamma works for the trader, but the theta and vega will kill the trade.

I would rather have 2 Greeks working in my favour and 1 against me, than the other way around.

And I totally disagree with the "short term vol is always lower than the long term vol.".

 

[spy]

What @taowave said should become obvious if you read this and understand the denominator of the following:

(he's got paper-thin skin though and won't see my post because he blocked me, lol)

Seriously,a mind is a terrible thing to waste...

Yeah,infinite gamma.....take Volatility down to less than 1,i.e 0.5 as opposed to 50%,and DTE 1 or less....Great,your gamma will exceed 1,assuming the instrument has close to zero vol with 2 seconds left on the clock...Now what??

Black Monday illustrates how clueless you are..What happened is exactly the OPPOSITE of what happens in your mind..You dont explode Vol to get "Infinite" gamma. You "theoretically" reduce it to as close to zero as possible,and shorten the DTE as in less than 1 day,hours or minutes.

Maybe I am mistaken,but I thought Vol went up on Black Monday..

Take a deep breath and have a nice cup of STFU

 

[taowave]

SPY was kind enough to "assist"..You have blocked all the posters who are most helpful...except for me...

What @taowave said should become obvious if you read this and understand the denominator of the following:

OMG!!! It's so complicated with all those "Vol", "DTE"!!! KISS!! LOL What happened to that? See, when I keep it simple, you bombard me with all these technical terms and jargons but when I try to explain to you with mathematics and my theories, you tell me to KISS. LOL

Whatever you just want to win. Fine, you win, infinite gamma does not exist. There, you happy? LOL

Anyway I have done everything to prove that a phenomenon of "infinite gamma" does exist and I don't think it can be explained by the conventional option pricing model with regards to vol. And I have always said that it's the extreme increase in vol. that could actually drive gamma to infinity.

I am done here.

 

[newwurldmn]

Then you have theta and vega working against you, and the only way to profit is via gamma.

PS - the only way the back iv will be higher than the front iv is if there is an event, like earnings, in between the two expiries. And in that case, the back iv is likely to rise with each passing day, thus working against the cal.

the SPX spends 90percent of the time in the term structure MrMuppet described.

Firstly, spare me the condescending tone.

Secondly, when buying a cal, sure there is gamma risk, but the theta and vega are working in the traders favour.
With your proposal of selling a cal, the gamma works for the trader, but the theta and vega will kill the trade.

I would rather have 2 Greeks working in my favour and 1 against me, than the other way around.

And I totally disagree with the "short term vol is always lower than the long term vol.".

the spx spends 90percent of its life in upward term structure.

Vega isn’t working for you or against you in any structure.

gamma and theta are linked: you pay one and receive the other.

Your view on gamma/theta and forward vol is what determines your position.

 

[TheDawn]

SPY was kind enough to "assist"..You have blocked all the posters who are most helpful...except for me...

Totally irrelevant to what I was talking about. I blocked him for a reason and I knew I made the right decision.

Anyway I already said you won. Infinite gamma does not exist. There. LOL No point arguing with people who don't really want to understand what I am talking about and instead just want to insist on a pricing model.

Boy you are really persistent. You must've been a really great MM, insisting on the last penny until the retail trader on the other side caved and chased your offer/bid. LOL Why did you quit? Just curious.

 

[taowave]

Got an offer from a major IB....

Totally irrelevant to what I was talking about. I blocked him for a reason and I knew I made the right decision.

Anyway I already said you won. Infinite gamma does not exist. There. LOL Why are you still pursuing this?

Boy you are really persistent. You must've been a really great MM, insisting on the last penny until the retail trader on the other side caved and chased your offer/bid. LOL Why did you quit? Just curious.

 

[taowave]

Hey there,how wide apart are you talking..Im typically a couple weeks wide at the most.Are you talking months as in 3 -6 months? Im bringing up different maturity continuous vol charts vs Historical vol to see the structure...

the SPX spends 90percent of the time in the term structure MrMuppet described.


the spx spends 90percent of its life in upward term structure.

Vega isn’t working for you or against you in any structure.

gamma and theta are linked: you pay one and receive the other.

Your view on gamma/theta and forward vol is what determines your position.

 

[newwurldmn]

Hey there,how wide apart are you talking..Im typically a couple weeks wide at the most.Are you talking months as in 3 -6 months? Im bringing up different maturity continuous vol charts vs Historical vol to see the structure...

From one month out it’s normally strictly upward sloping in quiet time’ss.