sure sounds like you have an axe to grind.
EVEN THOUGH, I've been agreeing with you the entire thread....on the exposure to risk...you're still arguing.
This is the basic premise of this whole thread:
Badtrades: yeah this is my strat. Its risky I know.
Dest: yeah your trade strategy is really risky
Badtrades: yeah I know its risky.
Dest: Your strat is sooo risky!!
BadtradeS: yeah i get its risky...
Dest: Your strat is soo risky!! I know lots about options, but I won't tell you anything more than what you already know about your trade...
Badtrades:...yes i know my trade strategy is risky...
Dest: Its so risky!! don't you get it? are you dumb?
yeah I get it, for your assumptions you're calculating a buffer % of vol for both current and implied. I'm guessing your trade process is like this:
1) Look at all the greeks,
2) use the greeks to come up with an expected value of a option contract.
3) plan your entries based on the expected value of said contract
4) add some buffer % for potential static vol and Implied vol
5) pick your strikes based off what you expect your strike prices to be.
6) pick a cap your losses if you're short premium.
7) pick an appropriate expiration date and date of closing.
I really don't get why you're arguing with me about me agreeing with you that what I'm doing is risky...
would it make you feel better if I told you that:
1) i also calculate the expected value of a contract based off a certain % move in the last hour? or w.e time frame I'm working in?
2) that I also then add a buffer % and pick a strike that is near or outside that buffer?
because that is what I do.
my expectation is to have the contracts close OTM...and i'd rather be short premium because sometimes you can win even if you're wrong.
lol to your expected value calc. As though the pricing will be different if you enter the inputs in some website options calculator. I'd love to see the math.
No, ignore the valuation -- assume, rightfully, that the implied vol is accurate for the strikes you are trading.
I have yet to bring them up (greeks) in this thread. You're ignoring everything that I've stated and are explicit in arguing terms not presented.
You stated, "not much can happen on Friday from entry to the close!"
I stated, "that's not the risk!"
OK, so continue to ignore the actual RISK out of the persistent cognitive dissonance that you alone can make this turd-stupid penny-strategy work. It works for you because you're comfortable with it. The mkt says no f*cks given to what you're comfortable trading.
No, the buffer is similarly retarded. Make the buffer out 10-strikes. You'll be shorting at cab, but wtf do you care, you're comfortable.
I'd rather be short premium because sometimes you can win even if you're wrong.
Thanks, that sums it up beautifully. It's number three in the 8-step program.
You want the opportunity to trade OTM (worthless!1) options at an edge? Buy the ATM bear fly. Buy an upside call against the bear fly. Wash, rinse, repeat. I will post a r/t example to this thread and we can revisit it along the way to LTD.
