Iron Condors and Stupidity

Quote from jwcapital:

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.
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The market keep on move up, and ignore all the bad news and only take in "good" news as an excuse to keep on rally - Not sure revert to MEAN will hold this time.

This is one of the most weird and unreasonable market I ever see, seemed like the market just want to move up regardless how bad is the fundemental (look at the job report today). Who is actually buying this time ? Any comment ? :confused: :confused:
 
Quote from SmithTheTrader:



This is one of the most weird and unreasonable market I ever see, seemed like the market just want to move up regardless how bad is the fundemental (look at the job report today). Who is actually buying this time ? Any comment ? :confused: :confused:
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Yes. You must be very young if this is the most unreasonable market you have even seen.

Mark
 
Mark,

You have to admit that the trend that we seen in the last 4 weeks is not something that we normally see in the market, right ? Indeed, a near 20% up in less than 3 weeks have been recorded as one of the most drastic market movement for the last 70 years.

I believe you are still with your IC with RUT - a 20 points up for RUT and couple with a rise in IV in one day don't seemed very sweet for IC position, This is why I am saying this is not a good month if you are IC player.
 
Quote from SmithTheTrader:

Mark,

You have to admit that the trend that we seen in the last 4 weeks is not something that we normally see in the market, right ? Indeed, a near 20% up in less than 3 weeks have been recorded as one of the most drastic market movement for the last 70 years.

I believe you are still with your IC with RUT - a 20 points up for RUT and couple with a rise in IV in one day don't seemed very sweet for IC position, This is why I am saying this is not a good month if you are IC player.
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I guess it depends on perspective. I found Oct 1987 to be far more 'unusual.' Monday's debacle and Tues morning's more of the same, followed by Tuesday's rally.

I found the April 1978 rally to be far more awesome. Don't recall how far the amrket moved, but with my positions is seemed to double overnight (yes, an exaggeration).

As for IC traders, sure it's not a good spot. But I'm doing the best I can by rolling my short call spreads higher and higher - before then get ITM. Current positions are very different from originals.

Am also buying very cheap put spreads (to close).

There are good months and other months. I'm in this for the long term.

Mark
 
Quote from dagnyt:

I guess it depends on perspective. I found Oct 1987 to be far more 'unusual.' Monday's debacle and Tues morning's more of the same, followed by Tuesday's rally.

I found the April 1978 rally to be far more awesome. Don't recall how far the amrket moved, but with my positions is seemed to double overnight (yes, an exaggeration).

As for IC traders, sure it's not a good spot. But I'm doing the best I can by rolling my short call spreads higher and higher - before then get ITM. Current positions are very different from originals.

Am also buying very cheap put spreads (to close).

There are good months and other months. I'm in this for the long term.

Mark
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The rally we have these days are happen almost continuous daily for 3-4 weeks (until now), which is different with those in the past in 1987, e.g.The probability that you have the continuous big rally (with 2-3% each) for an almost non-stop 20 days is almost like winning the jackpot in the lottery (obviously, probability means there is always a chance this things happen, or else no one will buy lottery ticket and you won’t be able to explain why some people keep on wining lottery several times in their life while most people never even win once in their life).

For me, i don't like to roll the positions as the market may keep on moving against your favour direction for quite sometime. I normally close it when it meet or full-filled my stop loss. However, each of us have a different taste of risk management and risk tolerance :D
 
IRON CONDORS are fine
if you do credit IC this market will suck the blood of you
but if you do "DEBIT IC" you are doing very well..

ps:don't blame options strategies
 
I'm not so sure. If you have legged into IC's (credit) then you have actually done OK. A debit IC is assuming the vix will actually increase. A credit IC will take the other side.
 
A nearly 5% move up in RUT today with IV remain almost unchanged really hurt for credit spread IC, but I resist NOT to make any adjustment by rolling up my call and put, as a sudden retreat inthe market(if happen) will hurt you twice- I wlll stay in the position and preparea for the worst -if I get kickcd out from the game when it hit my stop loss...

The market is really wild and the ride is really:(

Any words from other IC players there? (Mark, I already heard yours)
 
Quote from SmithTheTrader:

For me, i don't like to roll the positions as the market may keep on moving against your favour direction for quite sometime. I normally close it when it meet or full-filled my stop loss. However, each of us have a different taste of risk management and risk tolerance :D
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Correct. the market can move in either direction on any day. So what?

You do what you do and I'll do what I do and when you've been trading options for more than 30 years, come back and we'll compare track records.

Closing is fine. I often close positions instead of rolling. I only roil when I want to own the new position. And I want to own these. NOTE: I am not recommending that anyone else do that. I'm just commenting on how I trade. Then others can consider my ideas and accept or reject.

Mark
 
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