Destriero - Butterfly Trades
- Thread starter ironchef
- Start date
That was my kid's trades, but I have it on as well. Let me add (and it's a good point) that the microstructure on the put fly (natural) is poor, but there are no short ITM legs.
Anyway, you can't stress the thing to the wings as nobody is going to hold it to a touch of 1700 or 2500... but typically that's what I do with all structures--stress it to the point of neutral gamma.
Tenor--he figured a 30-day hold so we always double that on tenor--trading a 60D series on a 30D expectation.
Anyway, you can't stress the thing to the wings as nobody is going to hold it to a touch of 1700 or 2500... but typically that's what I do with all structures--stress it to the point of neutral gamma.
Tenor--he figured a 30-day hold so we always double that on tenor--trading a 60D series on a 30D expectation.
OK, appreciate the clarification.
I approach things different and use different criteria.
@destriero, Is vega of wings important criteria that makes them cheap in relation to the body of the fly?
Not really. It's the Speed (DgDs; Dgamma/Dspot). On index you're already fooked on the vol-line as the average vol you're paying on the wings is going to be much higher than ATM as represented by the risk-reversal (vol). Even on SN as buyers are going to be willing to pay a dollar-figure on a strike regardless of the vol-line.
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I read this thread because strangely enough it's interesting, but options......?? Am 99% clueless, not gonna start, way too complicated, waaay over my head. I'll just stick to pure long only stocks which is relatively easy.
But Kudos to you guys definitely!
I read this thread because strangely enough it's interesting, but options......?? Am 99% clueless, not gonna start, way too complicated, waaay over my head. I'll just stick to pure long only stocks which is relatively easy.
But Kudos to you guys definitely!
Options guys are nucking futs. Didn't you get that memo?
I read this thread because strangely enough it's interesting, but options......?? Am 99% clueless, not gonna start, way too complicated, waaay over my head. I'll just stick to pure long only stocks which is relatively easy.
But Kudos to you guys definitely!
@themickey, if you are 99% clueless, I am only 1% better. @Overnight, you got that right again.
I don't know about others on here, I just pretended I knew something so I spitted out gibberish to confuse everyone including you.
Have a nice day.
I read this thread because strangely enough it's interesting, but options......?? Am 99% clueless, not gonna start, way too complicated, waaay over my head. I'll just stick to pure long only stocks which is relatively easy.
But Kudos to you guys definitely!
with someone as smart as you, i'm kinda shocked by this post. Options aren't complicated. Its the industry that tries to complicate the simplex to deter on-lookers.
Although long stock is the best bet any avg investor should take... learning how to turn that linear payoff to a convex payoff won't hurt, while also using leverage to limit your risk. Thats not too complicated!