Destriero - Butterfly Trades

destriero said:
Yeah, a lot has changed in 17 years. I was mostly working legit arbs (COMS multi-listed under RAES) and rate arbitrage in the early 2000s. That, and unwinding of the telecom dereg and internet bubble. I didn't start making stupid money until I traded a bias. I've made more in the last four years than the prior twenty. I've doubled my net liq three times in the last four(years).

Don't trade neutral... even if it means a large reduction in exposure. I am not stating that you can't trade neutral wings, but it's not a trading strategy. And I am referring to systematic vol-sales via ICs and the like. It will always end badly unless you can time it or hedge in D1 or cheap verticals.

I am essentially trading permutations of one position in vol now. It's not flies, but I still trade flies in large size for a three to seven day hold.

Use wins to finance wing buys (deep verts). Trade futures around your position. Stick to liquid contracts. Work on a skew and smile model. Believe what you see and predict where it will be (sticky models).
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destriero said:
And by "bias" I mean it to express a move in strike vol on contamination/touch, not simply a market bias (but that, too).
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Still don't understand what you said, :( but,

Remember your BIIB fly? I finally figured out what you did there. Thanks a million. :)

How do I repay you sir? :D
 
.sigma said:
why do you think he thinks that, I’m curious.
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I am conscious that I am answering on behalf of the great man without permission for a second time, so I will tread carefully...

My reason was that having read through his extensive guidance on this site and indeed in his chapter in Traders of the New Era, he has spoken of putting a portion of gains into 'garbage puts' (deep OTM puts).

I think that him now suggesting putting a portion of gains into deep verticals would just be an extension of this idea.
 
Why on earth would you put money in DITM verticals (edge or no edge)with your win money??

It's basically the opposite of "wings"..


mjf61 said:
I am conscious that I am answering on behalf of the great man without permission for a second time, so I will tread carefully...

My reason was that having read through his extensive guidance on this site and indeed in his chapter in Traders of the New Era, he has spoken of putting a portion of gains into 'garbage puts' (deep OTM puts).

I think that him now suggesting putting a portion of gains into deep verticals would just be an extension of this idea.
More...
 
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