HowardCohodas Index Options Credit Spread Trading Journal

Status
Not open for further replies.
Atticus

Oh Wow! You just confused the heck out of me again now.

I´m sitting here pondering things and I realize now, that selling the PUTS and buying the CALLS was actually a directional UP MARKET move trade. Not a STRADDLE.

I can put it in imagery from my playing earlier this year with PAIRS TRADING I had read about on the internet. In this case I bought VIX and SPY but in opposing PUTS and CALLS. It works quite well, but finally figured it was a waste of time. Because the bet is in direction in PAIRS trading, and if you can do that, why both opposing bets? Just put the extra money on one direction bet. So that is what I did after experimenting with PAIRS TRADING for a while. Your trade over the weekend you describe seems to be something along the same line? Got to think on it for a while. I´m a slow learner.
 
For example you would want to be
LONG

if OTM money call volatility is cheap and equivalent long PUT ITM volatility was cheap.

There is something profound in here about an insight, but can´t quite put my finger on it yet.

Lets see, look at volatility on same line premiums for Calls and Puts. One would be Out the Money and one would be ITM. Instead of looking at the premiums look at the volatilities? The RR is figured by comparing ( deltas ? ) or rather ( Volatilities?) and this would decide whether you go LONG, or reverse the trade and go SHORT?

This is the magic trick for direction and entry?
 
Quote from Rodney King:

HoCo struck me as an earnest, intelligent guy. My totally unsubstantiated guess would be that he lost enough to damage the potential marketability of his website and/or associated products, but not enough to cause him lasting harm financially.
More...

Add a little ego bruising, and that's pretty much my assesment as well. "Intelligent" is a relative term too, since you have some of the most brilliant minds dedicated 24-7 to squeeze coins out of the market. Several Nobel prize winners failed miserably too, maybe they even sold or pawned their little gold medal.
 

Attachments

Quote from Rodney King:

HoCo struck me as an earnest, intelligent guy. My totally unsubstantiated guess would be that he lost enough to damage the potential marketability of his website and/or associated products, but not enough to cause him lasting harm financially.
More...


i hold the same opinion. some people get seduced more than others in the old sell vol arena, lol.

i was reading over the weekend a forum about another snake oil options 25% per month guru and a good 100 responses vs 2 or 3 were in his corner. these guys are a real cult of personality that invest a lot in their persona.(i know someone who got suckered personally, despite my overwhelming objections) there will always be lambs out there. something to consider if you own the slaughterhouse.
 
Quote from sellindexvol66:

i hold the same opinion. some people get seduced more than others in the old sell vol arena, lol.

i was reading over the weekend a forum about another snake oil options 25% per month guru and a good 100 responses vs 2 or 3 were in his corner. these guys are a real cult of personality that invest a lot in their persona.(i know someone who got suckered personally, despite my overwhelming objections) there will always be lambs out there. something to consider if you own the slaughterhouse.
More...

Yep... I'm fed up of trying to save people from themselves... Not just in terms of trading, but general scammy things like homeopathy etc

if you're really lucky you'll finally persuade em... and they'll follow you about for months asking irritating questions! They need a leader and if you don't want to be one it's a fecking nuisance. Can't win!
 
Quote from falconview:

Atticus

Oh Wow! You just confused the heck out of me again now.

I´m sitting here pondering things and I realize now, that selling the PUTS and buying the CALLS was actually a directional UP MARKET move trade. Not a STRADDLE.
More...

RR are best to stay away from unless you're reasonably confident of a large rally, IMO. Spreads will tend to be tighter when it's time to offset, and you win from the volatility strip (vertical chain of strikes going lower on volatility). There are other factors which make the bull reversal more favorable under one to two stddevs.
 
Well I looked at the SPY this opening. Nothing much to compare as the market is basically neutral.

However I did run the SPY 129 strike delta and volatilities across the option chain and also the SPY 130 strike implied volatility across the option chain, with an OTM and the ITM. They were also more or less aligned both in delta and IV. ATTICUS got me curious.

I could not get any forecasting reading out of it. There was little difference between them on one line of the option chain in TOS.

The curiousity then is aroused to see them when I might have a trend move predicted. As for this morning, nothing there at all. Though maybe this afternoon something might develop. In the meantime, think I will go shower and shave and get some breakfast, got to make a run to a drugstore for some meds.
 
Tos maybe 20 min. delayed yet for me. Still I looked at the SPY 130 strike spread between bid and ask. Normally it is 1 cent.
This morning the CALLS were 2 cent spread and the PUTS were 3 cent spread. This is probably telling me something as to direction of the market, but not sure yet?
 
Status
Not open for further replies.
Back
Top