Earnings strangles

akivak · Nov 30, 2011

Quote from Rodney King:

My feedback would be: You're indoors, so lose the sunglasses unless needed for medical reasons. Looking like a buffoon detracts from your excellent content.

If this is your only comment, I'm in a good shape

But point taken, the picture has been changed.

akivak · Nov 30, 2011

Quote from spindr0:

I think that it's a well written article describing your utilization of long strangles for earnings releases.

I think that most posters here understand the lingo but if you're going to write one or more articles on this topic or other option topics, it might be helpful to some to have a link to a page with brief definitions/explanations of option terminology, eg. implied volatility, delta, negative theta, etc..

That's an excellent idea, thanks!

Which site would you recommend for the best definitions? Investopedia maybe? Any better ideas?

akivak · Nov 30, 2011

Quote from sle:

Couple questions for you to think about:

(a) Do you want to hedge your gamma/decay by selling some index vol?

(b) don't you think that some of that earnings volatility would actually be priced in?

Actually this is exactly what I do, trading RUT and NDX condors

Volatility usually increases the most in the last few days. It is pricing the expected move, so if you leave it for earnings, then you need larger move than priced in by the options. But I sell before earnings, not after.

Rodney King · Dec 1, 2011

Quote from spindr0:

helpful to some to have a link to a page with brief definitions/explanations of option terminology, eg. implied volatility, delta, negative theta, etc..

I would respectfully disagree. I think anyone sophisticated enough to be reading this article will already know those terms, or at least be able to Google them. I don't think he needs to "talk down to" his readership.

spindr0 · Dec 1, 2011

Quote from Rodney King:

I would respectfully disagree. I think anyone sophisticated enough to be reading this article will already know those terms, or at least be able to Google them. I don't think he needs to "talk down to" his readership.

Not everyone knows everything about everything. Providing a link to a "definitions" page isn't talking down to someone. For the very "few" who don't understand every option term, it's a convenience, saving them the time of having to Google something and then having to sift through multiple sites to find what is sought. If you fully understand the content, you don't click the link to the "definitions" page.

So we respectfully agree to disagree.

spindr0 · Dec 1, 2011

Quote from akivak:

That's an excellent idea, thanks!

Which site would you recommend for the best definitions? Investopedia maybe? Any better ideas?

If Investopedia provides explanations acceptable to you then you're done. If not, it's back to the options texts.

akivak · Dec 1, 2011

Quote from spindr0:

If Investopedia provides explanations acceptable to you then you're done. If not, it's back to the options texts.

Investopedia has very brief explanations which I find not always sufficient. Not sure if it`s good or bad. For example, compare the definition for iron condor:
http://en.wikipedia.org/wiki/Iron_condor
http://www.theoptionsguide.com/iron-condor.aspx
http://www.investopedia.com/terms/i/ironcondor.asp#axzz1fIE6rCk2

Which one would you prefer if you were a novice trader?

Rodney King · Dec 1, 2011

Quote from akivak:

Which one would you prefer if you were a novice trader?

Why not provide your own brief definition in a sidebar, possibly with a link to an external resource such as those you list?

spindr0 · Dec 1, 2011

Quote from akivak:

Which one would you prefer if you were a novice trader?

Here's the easy way out. Provide a number of links which AFAIK, is going above and beyond. A brief sidebar would explain that web sites provide explanations in various degree of depth and if the reader wants more complexity than that, he can Google away. Rather than sifting for the best explanation, write more articles that accelerate the learning curve.

76132 · Dec 1, 2011

Quote from akivak:

Investopedia has very brief explanations which I find not always sufficient. Not sure if it`s good or bad. For example, compare the definition for iron condor:
http://en.wikipedia.org/wiki/Iron_condor
http://www.theoptionsguide.com/iron-condor.aspx
http://www.investopedia.com/terms/i/ironcondor.asp#axzz1fIE6rCk2

Which one would you prefer if you were a novice trader?

Not wikipedia, too long and too much words, and it goes off on tangents.

I like the Options Guide since it lays it out to you what you need to buy/sell, is concise, and has graphs. And if I remember correctly, the pages are standardized so if I look at another strategy, I get the same sections on each one.

Investopedia is too short and no graphs.