HowardCohodas Index Options Credit Spread Trading Journal

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Quote from Eliot Hosewater:

Good videos. Thanks for posting it.

What happened to Dean?
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they are good informative for both new and older players, back when volatily blew up in 2008, he had a video which talked about how the vix futures stopped rising while the vix itself kept going up, the implication is obvious, you should check that out, I am sure someone hit a homer on that divergence. :)


http://masteroptions.com/?cat=3

under vix video see around minute 4
 
Quote from HowardCohodas:

You may if you can. :)
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I can't because I haven't read it. Call me lazy or disinterested, but 99.9% of threads like that (or this one) do not deal even satisfactorily with tail risk.

In my experience, if you don't deal with tail risk head on upfront, you'll be screwed sooner or later. Guard your tail to save your ass!.
 
Quote from HowardCohodas:

Journal entry under Trials and Tribulations

THIS ACCOUNT HAS NO AVAILABLE BUYING POWER

This status came about because one of the spreads I opened yesterday had a leg adjacent to another spread in the same series. Their quarantined funds calculator thinks I was trying to form a butterfly rather than completing an Iron Condor. Software bug!

I was trying to complete my roll so I called the trading desk and they executed it for me, including several tries at limit orders until a fill was obtained.
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That was back in Jan; if he got that message from TOS, regardless of what kind of spread he was trying to do, point is that he was very close to using up all his BP to short vol. Basically his account was all ready near 100% margined out on short vol and there is no reason to suspect that he wasnt also near maxed out during the nuclear incident.

TOS margin is realtime dynamic, it will prevent you from putting on trades that exceed your BP, although he was merely trying to complete his spread, it means that he was so far margined, that he didnt have enough.

Based on that, I suspect he was margin called or rolled out for heavy losses. What ever the case may be if he was near 100% BP, he must have experienced an intraday equity down draw of >75% and it could have been auto liquidate if the 3/15/2011 rally didnt happen.
:eek:
 
Quote from kinggyppo:

Quote from eudaemon:

Can you post a 1 sentence summary version?. [/QUOTE

There is no edge in selling vs buying options, paging the one and only riskarb.
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In other words this means that one needs a directional edge, in either price or volatility, to make money long term, and that "premium selling" by itself is a non-edge?. Good thing I didn't read the thread...
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Quote from eudaemon:

In other words this means that one needs a directional edge, in either price or volatility, to make money long term, and that "premium selling" by itself is a non-edge?. Good thing I didn't read the thread...
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not exactly news if you are a 20 year market maker, but makes the point very well as does this thread. Its the old bleed vs blowup argument.
 
It has taken me years of trial and error to learn the above comment.
The sucker amateur advertising is so well established, leading people down the garden path.

I more or less as a small amateur, figured that direction and volatililty was the thing to making money, just confirmed recently over the past 5 months. I´m really sorry for the years of wasted time, listening and reading CRAP, put out by charlatans.
 
Quote from DGunz:

That was back in Jan; if he got that message from TOS, regardless of what kind of spread he was trying to do, point is that he was very close to using up all his BP to short vol. Basically his account was all ready near 100% margined out on short vol and there is no reason to suspect that he wasnt also near maxed out during the nuclear incident.

TOS margin is realtime dynamic, it will prevent you from putting on trades that exceed your BP, although he was merely trying to complete his spread, it means that he was so far margined, that he didnt have enough.

Based on that, I suspect he was margin called or rolled out for heavy losses. What ever the case may be if he was near 100% BP, he must have experienced an intraday equity down draw of >75% and it could have been auto liquidate if the 3/15/2011 rally didnt happen.
:eek:
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You may not understand the problem with the ToS margin calculation since your conclusion is not factual.

Furthermore, your suspicions are not accurate with respect to what happened in March.
 
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