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help? for people researching options training
- Thread starter IVtrader
- Start date
Quote from daveyc:
iron condors are way oversold as the way to riches but if you have traded them at all over the past year, you will understand there is much more to the equation and have no doubt lost a sizable sum.
I'll probably be badly flamed for this, but I don't really agree that anyone trading Iron Condors this past year would necessarily have a large loss, or even a loss for that matter.
When I do trade Iron Condors, I use SPY - look at SPY from a monthly view - Jan, Feb, Mar, Apr, May, Jun, Jul, Aug there really wasn't that much movement. That is plenty of time to get nice premiums with minimal adjustments and losses in between.
Then Aug thru Sept was bad. However, if the person acted quickly enough and rolled down the short puts (maybe to Nov for example and remember that the premiums were up due to the VIX, etc, etc.) they could have kept any losses reasonable during that stretch.
Since then, Sept-Oct, then Nov, the Dec again SPY didn't move all that much month to month despite the daily volatility that talking heads on TV shout about. Look at SPY close Sept/Oct/Nov/Dec on the 15th or 16 of each month - almost no changes at all.
JJackET4
Yeah, my hindsight book is doing great too...Quote from JJacksET4:
However, if the person acted quickly enough and rolled down the short puts (maybe to Nov for example and remember that the premiums were up due to the VIX, etc, etc.) they could have kept any losses reasonable during that stretch.
Quote from JJacksET4:
... That is plenty of time to get nice premiums with minimal adjustments and losses in between.
Then Aug thru Sept was bad. However, if the person acted quickly enough and rolled down the short puts....
Too much gray area in hindsight. We are talking about a certain outcome (profit/loss).
"if the person acted quickly enough and rolled down" - Well, then that also means they would be acting quickly enough in the 'good months' also . It's not like they forcasted ahead of time that Aug-Sept would be the time to roll, whereas earlier in the year they should have stuck to their guns. So, they would have taking some losses in the move lower in the middle of March, likewise for the beginning of June. And if they are rolling the call side down also, that means they were subject to whipsaw on the rallies back up. Early October, would have been obliterated on the call side, unless they just happened to 'know' exactly when to roll up....just too much gray area.
Unless someone tries to do it in realtime and show us...oh wait, Howard Cohodas. end thread.
Quote from sle:
Yeah, my hindsight book is doing great too...
It has nothing to do with hindsight. You simply place your trades and then you do what you gotta do. My point is that someone who placed Long Iron Condors each month probably could have made money 10 or 11 out of 12 months, and if they had an understanding of when risk was coming big time, they rolled, they might have had one reasonable loss that wouldn't have cost them too much.
I have no idea what the market will do day to day, but at Dec Expiration, I was short 118 and 116 puts and 126 and 128 calls. SPY ended at 121 something, but had been in the 116 and the 126 ranges.
Just for an FYI I am currently short SPY Jan 117 and 116 puts that were put on with SPY in the lower 120 ranges. They look good now, but again, I will do what I have to do when I have to do it.
JJacksET4
Quote from JJacksET4:
and if they had an understanding of when risk was coming big time, they rolled
That one statement, that's where all the edge is. It's not in the structure of the roll, the expiry, how far OTM, or any of the other fluff online; it's the forecast on future volatility. But that's not what's being sold in options mentoring. Not in realtime, anyway.
Quote from swag:
That one statement, that's where all the edge is. It's not in the structure of the roll, the expiry, how far OTM, or any of the other fluff online; it's the forecast on future volatility. But that's not what's being sold in options mentoring. Not in realtime, anyway.
I do generally agree with you on that. If you look at SPY July 29, Aug 1, Aug 2, it was falling and the vol was rising quickly. Definitely might have been a sign to consider protecting the put side, whether closing or what. Obviously if you still had the LIC on by Aug 10th, things weren't going good.
JJacksET4
Quote from sle:
So, in short, the "adjustment" strategy is to add to a losing position and hope for mean reversion?
I don't know exactly how to answer, but I guess every investment can involve some "hope".
If the market roars upwards, I might then sell some Bear Call spreads figuring the market will have trouble going up in a str8 line. On the other hand, if SPY were to fall into the 117/116 or lower area, I might close my positions if I felt there were reasons to think it would continue to fall or I might roll to something like short 112/long 107 FEBs or MAR if I figured bargain hunting would come in.
Again, I don't know where the market will go, but there are obvious times where there is great risk either to the downside or for a quick rebound, and I want to minimize being short options at those times and be in when the market is going back and forth. I would suggest that right now, SPY isn't likely to move 10+ points in one direction next week for example (but it could).
JJacksET