Iron Condors and Stupidity
- Thread starter jwcapital
- Start date
Mark is correct regarding the OEX. When I first embarked on my naked put selling several years ago, I used the OEX as my underlying. It was a nightmare. One, it was very volatile. Two, the margin required was high compared to the ES FOP's. You do have to be careful foolling around with American'style options, for they do get called when ITM. I also had to think about who trades the OEX. Mostly professional money managers buy puts for asset protection (hedging). Knowing this makes it the toughest market to trade. At least the ES FOP's have many more speculators.
XEO=OEX=DIA=DJX THE SAME % RETURN
TOO MUCH DRAMA FOR NOTHING
TOO MUCH DRAMA FOR NOTHING
XEO is the solution of early assignment for OEX
xeo, oex , dia, djx all this indexes have the same % return
if you can't make money on american style options why european style would be diferent?
there is no misinformation ...
The market move up in almost a straight line again for this month, and bull today with another 200 points even with all the bad news (flu, GDP..), interesting !
..and good luck to all the IC traders
..and good luck to all the IC traders
XEO is not as easy to trade with very wide markets and disinterested market makers. A very bad product.
But it is safer than OEX.
But the percentage return is not the same for each of those indexes. These indexes do not correlate anywhere near 100% - and that's what's needed to make the same % return on an investment.
Or do you make up your own math to go along with your own definitions?
Where did you get the diea that I suggested that investors cannot make money with American style options?
European style have major advantages - and that alone makes it easier to trade. No early exercise is a nice feature and cash-settled is far better than share-settled options. Reduced commissions, no margin problems via assignment. Just a better product.
Mark
Smith the Trader-- how close are you putting your IC's to the current prices of the index you are working with? It seems to me that you may be cutting things too close, and then running into trouble as a result. I know that the last couple of weeks haven't been that explosively upward. They should be easily in the realm of manageable changes, and not particularly alarming for IC traders, given a reasonably spaced position.
If you are aiming for super high returns with IC's that are close to the money, you may want to buy a little insurance. Mark and I had a bit of a discussion about that two or three pages back in this thread.
I'm pleased with how the insurance spreads are working. My delta/ gamma has been pretty small consistently, and I've been hyper conservative. I made a little adjustment upward in the call spreads that probably wasn't necessary, but I was prepared to spend a little to keep things very comfortable. I like my sleep, and I find myself actually hoping the market will keep tracking placidly upward over the next few weeks. Of course, if it stalls or even drops modestly, I'll still be in a good position to make some money. With the low commission levels currently available, and reasonable bid-asks, a multiple spread position is doable. You do give up a little piece on each, and your typical monthly return will be less, but occasionally there will be a real winner (an insurance spread that maxes out) to help compensate for the trouble, and some protection against sharper moves in either direction in every month.
If you are aiming for super high returns with IC's that are close to the money, you may want to buy a little insurance. Mark and I had a bit of a discussion about that two or three pages back in this thread.
I'm pleased with how the insurance spreads are working. My delta/ gamma has been pretty small consistently, and I've been hyper conservative. I made a little adjustment upward in the call spreads that probably wasn't necessary, but I was prepared to spend a little to keep things very comfortable. I like my sleep, and I find myself actually hoping the market will keep tracking placidly upward over the next few weeks. Of course, if it stalls or even drops modestly, I'll still be in a good position to make some money. With the low commission levels currently available, and reasonable bid-asks, a multiple spread position is doable. You do give up a little piece on each, and your typical monthly return will be less, but occasionally there will be a real winner (an insurance spread that maxes out) to help compensate for the trouble, and some protection against sharper moves in either direction in every month.