I am new

daddy'sboy · Jul 26, 2006

I've been following this thread but have been too frightened to ask as it may sound a bit stupid, but what is "PPS" - as in "significant impact on the PPS in either direction"?
daddy's boy

momoneythansens · Jul 26, 2006

Quote from daddy'sboy:

I've been following this thread but have been too frightened to ask as it may sound a bit stupid, but what is "PPS" - as in "significant impact on the PPS in either direction"?
daddy's boy

Take your pick

JSHINV · Jul 26, 2006

Quote from daddy'sboy:

I've been following this thread but have been too frightened to ask as it may sound a bit stupid, but what is "PPS" - as in "significant impact on the PPS in either direction"?
daddy's boy

One of the other posters on this thread suggested a trade with KCI and used pps. In that context it was "price per share." Actually, if I made the trade as he suggested, I would have made money.

In any case Rallymode and MoMoney have given me some home work this weekend.

I am out of town this week and I get looks from my wife when I am in front of a computer screen and have my head buried in options books all weekend, after being gone the week before.

So, I may have to limit this fun stuff during the weekend.

Thanks, all.

John

daddy'sboy · Jul 27, 2006

Quote from momoneythansens:

Take your pick

That was helpful! :mad:

daddy's boy

daddy'sboy · Jul 27, 2006

Quote from JSHINV:

One of the other posters on this thread suggested a trade with KCI and used pps. In that context it was "price per share." Actually, if I made the trade as he suggested, I would have made money.

In any case Rallymode and MoMoney have given me some home work this weekend. I am out of town this week and I get looks from my wife when I am in front of a computer screen and have my head buried in options books all weekend, after being gone the week before. So, I may have to limit this fun stuff during the weekend.

Thanks, all.

John

Thanks for explaining PPS. I just saw that it's also a stock symbol.
Best
daddy's boy

momoneythansens · Jul 27, 2006

Quote from daddy'sboy:

That was helpful!
daddy's boy

Wonder if you noticed the title bar, URL and pre-filled search box at the top of the page when you clicked on the link? *shrugs*

JSHINV · Jul 27, 2006

I have read this quote a few more times. It reinforces what I said before how much sense it makes.

But, I want to look at and understand it in the context of Riskarb's Arb's fly to conversion: I quote:

"Simple to follow journal of vanilla equity and equity index short combo to iron butterfly conversions; short gamma/vega and long theta at neutral delta. Conforms to my basic tenet to sell downside and buy upside gamma curvature. . .

The initial short gamma/vega combo will be converted to a short iron fly[synthetic long call or long put fly] when/if certain conditions are met; a flattening of the vol-smile[wing vol compression], opportunity gains from an strip-vol decline, sufficient decay, or simply an arbitrary time limit or delta position incurred on the short body strike."

You may not hear for me for a week or two, because before I respond i hope to have a theoretical understanding of the above journal quote as well as the gamma and negative gamma scalping often mentioned on these boards. Alas, a theoretical knowledge, and I don't even having that yet on this matter, is not the same of having that knowledge when money is on the table. Give me some time, becase I am going to try to come back with some intelligent questions on these issues.

Quote from momoneythansens:

John,

I think most people realized you were hedging your short straddle with the underlying on adverse moves. Despite your request not to know the definition of what you are doing, I'll tell you it is called negative gamma scalping. If you research gamma scalping long straddles and then reverse the process for short straddles, you wil see what I mean.

. . . you do this many times but as I stated earlier, this is not a strategy for longevity IMO.

There is a reason why implied volatilities get pumped up above statistical approaching these events. It is key to understand why. The high implied volatility is telling you that there is an expected large move impending. It would be nice to scan for these large differentials and simply sell in order to capture the reversion to statistical. Alas, it is precisely the large differentials that you need to be wary of. There is always a reason.

Again, I would stress that the notions of buying cheap and selling expensive are not as straightforward to implement as first meets the eye.

Persevere.

MoMoney.

daddy'sboy · Jul 27, 2006

Quote from momoneythansens:

Wonder if you noticed the title bar, URL and pre-filled search box at the top of the page when you clicked on the link? *shrugs*

Oops!

Thanks mmts.
daddy's boy

Eliot Hosewater · Jul 27, 2006

Quote from JSHINV:

I have read this quote a few more times. It reinforces what I said before how much sense it makes.

But, I want to look at and understand it in the context of Riskarb's Arb's fly to conversion: I quote:

"Simple to follow journal of vanilla equity and equity index short combo to iron butterfly conversions; short gamma/vega and long theta at neutral delta. Conforms to my basic tenet to sell downside and buy upside gamma curvature. . .

The initial short gamma/vega combo will be converted to a short iron fly[synthetic long call or long put fly] when/if certain conditions are met; a flattening of the vol-smile[wing vol compression], opportunity gains from an strip-vol decline, sufficient decay, or simply an arbitrary time limit or delta position incurred on the short body strike."

You may not hear for me for a week or two, because before I respond i hope to have a theoretical understanding of the above journal quote as well as the gamma and negative gamma scalping often mentioned on these boards. Alas, a theoretical knowledge, and I don't even having that yet on this matter, is not the same of having that knowledge when money is on the table. Give me some time, becase I am going to try to come back with some intelligent questions on these issues.

If you can come up with a Riskarb to simple English translation I would be interested.

JSHINV · Aug 4, 2006

Quote from rallymode:

I ccouldnt help but notice this so i will give you some nice weekend reading. Nothing wrong in leaning towards selling vs buying options just make sure its for the right reasons.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=53037&highlight=living

Rallymode, et. al.

I haven't gone away - lost my money or anything. I just am reading the thread you posted. I find it very interesting. I am only on page 31 and it goes to 141. I am going to read it all. I pay particular attention to the common themes of the successful traders. They emphasize the same points over and over trying to get through the thick skulls of beginners like me what is involved and what we have to know.

I'll be back again with questions. But, for now, I am taking it all in.

John