The type of people who shit on posters like Dest are the same type of people who sign up for a Timothy Sykes trading course
Destriero - Butterfly Trades
- Thread starter ironchef
- Start date
flys are slow moving too, though...
that’s what makes them so attractive, you slap on a few flies and notice your day to day var is low. Maybe this is why MM’s books are filled with flies. But I get what you’re saying with the condors.
This is true. I dug into the forums and studied a lot. For years, idk if ppl know (better if they don’t) but ET old threads and even still to this day had/has some of the best gems about trading/option you’ll ever find on the net. It’s free and worth more than these discord’s will ever be.
Y’all remember that $1,000 bet that I won from Poopy Dest? I just used it in $1 bills to wipe my ass after Thanksgiving! Never felt better!
Oh no, not this shit again. LOL
4-8 weeks for condors.. Or does this apply to flies as well?
Bobby what you know about flies? You’re too scared to sell guts ATM lols
This is not exactly right. Depending on how you structure it (the belly ATM or the belly OTM), flys can express somewhat different views.
For example, I trade a fair bit of ratio flys (@taowave you know the name for those, right?
) in the indices, but in my case i do them with bellies OTM. They work well if I can find a structure that's flat decay, long local gamma and short vega - all while getting the widest strike spread between the wings relative to the premium. In that case, it essentially becomes a loss-limited way to short the skew while getting (or tolerating) mild directional exposure - especially when skew is steep and the wings are negatively convex. If nothing happens, because of the wing decay, your risk profile will look more and more like a vanilla option Alternatively, when you trade a fly-like structure with belly ATMish, you are expressing a view to be short vol and cover the wings (sometimes in a ratio to buy less expensive wings). So you trying to find overpriced vol and possibly skew if you are doing a ratio structure. In that case you are going to be decaying positively, have somewhat short gamma and vega and hope that the underlying does not much much. As the time goes and your wings decay, the structure becomes more of a straddle.
It's very rare that a market making book will have something as well defined as "a fly". You get hit or lifted on something (hopefully at a good price), you book it and skew your markets to cover the risk. Sometimes you get lucky and cover in an identical option, sometimes in something close by and sometimes in a different part of the surface (or even different underlying). MM's books are filled with amorphous positions and they get paid for managing these positions. The general idea is that you buy things somewhat cheap and sell things somewhat rich - do that a lot and positive edge adds up to a nice fat check at the end of the year.
