Is this a good diagonal spread trade?

Overnight said:
I never would have guessed you were from the old country. Where do you hail from?
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What? Man, are you getting Old-Timer's Disease? A touch of CRS, maybe? :sneaky: It's come up countless times in our convos, both here and elsewhere.

I came here from the USSR in 1975. These days, knowing Russian really comes in handy for trolling the vatniks and the pro-Putler crowd...

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Now that is what I call music. (Inserting intentional Americanism here) Even a blind hog can find an acorn every now and then, right? :D I mean, it's not one of Gilmour's best efforts, but it'll do - especially compared to... whatever that earlier zipless thing was.
 
BlueWaterSailor said:
What? Man, are you getting Old-Timer's Disease? A touch of CRS, maybe? :sneaky: It's come up countless times in our convos, both here and elsewhere...
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Dude, our last Vox call was like 2 years ago, and I don't have CRS. It is CRSS. Get the acronym correct. Hehe.

And we'll get you into the Zipless thing, about the same time you get me into your option spread idea. So probably an impasse there.

In the middle we have NATS.


Sorry sorry, I just recalled this is an options thread. Back to your psycho convo with OP about options, you crazy fuks.
 
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Overnight said:
Dude, our last Vox call was like 2 years ago, and I don't have CRS. It is CRSS. Get the acronym correct. Hehe.
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Can't Remember Shit, also known as the CRAFT disease. Boy, I'll larn ya to speak 'Murcan if it's the last thing I do!

And we'll get you into the Zipless thing, about the same time you get me into your option spread idea. So probably an impasse there.

In the middle we have NATS.
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Can't deny it - it looks like a bunch of swarming gnats... sounds like an extended version of a Verizon ringtone, though. Do better. :)
 
BlueWaterSailor said:
Can't Remember Shit, also known as the CRAFT disease. Boy, I'll larn ya to speak 'Murcan if it's the last thing I do!
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Your cannot have Can't Remember Shit. (CRS)

But you can have Can't Remember Shit Syndrome. (CRSS)

Can't deny it - it looks like a bunch of swarming gnats... sounds like an extended version of a Verizon ringtone, though. Do better. :)
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I guess you and I do not share the same passion for aviation. Oh well, it was a reach. YOu just seemed a scientific and staid type of lad that like strict lines! My bad.

 
earth_imperator said:
Can you tell/analyze whether the following "Put Diagonal Bear Spread" is a good trade or a bad trade? :
Code: 
Spot=0.54
ShortPut: DTE=44  K=1.50 Pr=1.22
LongPut:  DTE=100 K=6.00 Pr=5.70
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My question to you is why would you consider this trade? You need to calculate the forward vol edge as a starting point
 
Adam777 said:
My question to you is why would you consider this trade? You need to calculate the forward vol edge as a starting point
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I don't know, so I ask the Elite of the Elite of Elite Traders on Earth :D

Is this a good trade till the expiry of the ShortPut, under the assumption that vol of the LongPut stays same, and that at expiry of the ShortPut the remaining LongPut will be closed as well.

Another curiosity in this spread trade: at entry both strikes are ITM.

My own preliminary calcs tell me that it's a good trade, though other standard tools say it's a bad trade, but IMO these other tools/fools don't grasp the situation... :).
 
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If you don't understand forward vol, that cuts out calendars as well. There's so many other opportunities. If iv is high and dropping then trade OTM put flys. If iv is low and rising then trade OTM put and call spreads; and look at the price direction on the chart. This is the simple and safe version of option trading. Just put them on and watch how the T+0 line on your option model charts change over time.
 
Adam777 said:
If you don't understand forward vol, that cuts out calendars as well. There's so many other opportunities. If iv is high and dropping then trade OTM put flys. If iv is low and rising then trade OTM put and call spreads; and look at the price direction on the chart. This is the simple and safe version of option trading. Just put them on and watch how the T+0 line on your option model charts change over time.
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Can we just concentrate on this given diagonal 2-leg spread trade? That's the topic here, not any OTM flys etc.

And what's this "T+0" line? Never heard so far.
Explained here: https://forums.aeromir.com/threads/what-is-t-0-line.1462/

And: most people don't even know the exact definition of calendars: it's only if both strikes are same, otherwise it's a diagonal. In both cases of course assuming different DTEs. Otherwise it's of course just a normal vertical :)

Forward volatility for me means just predicting the future volatility. Isn't it?
But as said, it shall be assumed that the volatility of the LongPut stays the same, so nothing to predict here.

Since under these constraints (assumptions) just only one unknown remains (the spot), then the outcome of this trade can be computed in advance for all possible spots... though it's not any different to calc it similarly for any other IVs...
 
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All the off-topic poster idiots and spammers here I just have put them into my ignore list :D Enjoy, folks!

PM me if you think you are wrongly in my ignore list. [If that's possible at all in this system :) Dunno, not my problem :)]
 
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