Iron Condors and Stupidity

riskfreetrading · Mar 24, 2009

If options are priced correctly, and an IC is left until the end and you play the game as if you will live forever, it has a negative expected value from the start, not because of spreads and commissions but because of _______. There should be some gems for you in there to nail your ICs better!

If people make money on them under above scenarios, then there are others reasons they make money such as: they have not played long enough, option premium is more expensive than it should be in reality (in other words implied Volty is higher than realized), and/or they guess better a range bound market than the probabilities implied from option pricing.

RFT (Risk and Financial Traders) :-)

tyrant · Mar 24, 2009

Quote from riskfreetrading:

If options are priced correctly, and an IC is left until the end and you play the game as if you will live forever, it has a negative expected value from the start, not because of spreads and commissions but because of _______. There should be some gems for you in there to nail your ICs better!

If people make money on them under above scenarios, then there are others reasons they make money such as: they have not played long enough, option premium is more expensive than it should be in reality (in other words implied Volty is higher than realized), and/or they guess better a range bound market than the probabilities implied from option pricing.

RFT (Risk and Financial Traders)

No. You lose not because of ______ but because of ______. Give it a thought. There is gem in there.

spindr0 · Mar 24, 2009

Quote from tyrant:

No. You lose not because of ______ but because of ______. Give it a thought. There is gem in there.

Only a select few are privy to the closely guarded trading secret known as ______

MTE · Mar 25, 2009

Guys, I don't know what the heck you are talking about! The only way to make money with ICs is to use _____ and the only reason people lose money on ICs is ______ (I'm talking from experience).

spindr0 · Mar 25, 2009

Quote from MTE:

Guys, I don't know what the heck you are talking about! The only way to make money with ICs is to use _____ and the only reason people lose money on ICs is ______ (I'm talking from experience).

Now I'm really disappointed in you! I sold you the manual for the Market Trading Secrets of ______ and you still don't get it???

Do I have to become your fee based mentor as well ???

MTE · Mar 25, 2009

Quote from spindr0:

Now I'm really disappointed in you! I sold you the manual for the Market Trading Secrets of ______ and you still don't get it???

Do I have to become your fee based mentor as well ???

You can be my mentor only if you show me how to use _____ exactly!

riskfreetrading · Mar 25, 2009

___ works

jwcapital · Mar 25, 2009

You guys are missing my point with the March IC. As I have shown, the action in March was ideal for an IC. It is great to be able to close out the bear call spread and the bull put spread and keep 90% of the premium received initially. In other words, you want extreme moves to the downside and upside. As dagny pointed out, the probability of the underlying TOUCHING your short call/put is higher--on a relative basis--than the underlying keeping the option ITM. Overbought, oversold, and mean reversion are REAL phenomenons--forget about fundamentals and even technicals. Markets do rebound and pull back no matter what.

In less volatile markets, I have maybe kept 70-75% of the total premium, for I didn't get the swings. sometimes, I was lucky to keep 50%. Anyway, IC's and short straddles have worked for me. Even bull put spreads alone have worked. I can chooose my startegy based on the volatility and time remaining until expiration. As someone else said, there are many ways to win...it is managing your trades that matters.

spindr0 · Mar 25, 2009

Quote from MTE:

You can be my mentor only if you show me how to use _____ exactly!

Well, as a mentor, I would not be showing you what supposedly worked, but what worked for you, the persons involved in the mentoring which would be showing you that the model itself works. You would be the biggest of all winners because we know who is the person who does not recognize good deals: the person paying the two persons involved in the mentorship model to get that education.

Now if you want the simplified risk free trading version, all you need is <-----> which strategically points you non directionally and comes with a free Ron Popeil Veg-o-matic! And best of all, there's our top shelf model <===> affectionately known as the SHLONG indicator of frequent traders - a bit of a tautology.

So sign up now.

MTE · Mar 26, 2009

Quote from spindr0:

Well, as a mentor, I would not be showing you what supposedly worked, but what worked for you, the persons involved in the mentoring which would be showing you that the model itself works. You would be the biggest of all winners because we know who is the person who does not recognize good deals: the person paying the two persons involved in the mentorship model to get that education.

Now if you want the simplified risk free trading version, all you need is <-----> which strategically points you non directionally and comes with a free Ron Popeil Veg-o-matic! And best of all, there's our top shelf model <===> affectionately known as the SHLONG indicator of frequent traders - a bit of a tautology.

So sign up now.

Wait a minute! Where does <-----> come from!? We never talked about <-----> or <===>, for that matter. I want _____ and not some weird stuff like <-----> or <===>. So the deal is off, you have lost your privilege to be my mentor!