Long dated buying

[BlueWaterSailor]

I don't think you can get a 10-20:1 payoff with a spread, can you?

I can get a payoff of infinity with a zero-cost backspread. Does that count?

 

[BlueWaterSailor]

Because it is 'easier' (lol) to 'forecast' a direction than a box (one variable less)?

For spreads, I wouldn't call decisions about width "forecasting". It may be driven by margin considerations, or the average range for the tenor, or the amount of risk I feel like taking on a given trade. That's quite different from the "working" strike.

I don't think that relationship is lineair, but get your point. That was what I meant with smoothing the returns distribution

It's not, of course; I used shorthand in the hope you'd understand. You did.

 

[BlueWaterSailor]

I have not been able to profit from flies, no matter how hard I tried.

I understand your frustration; it took me a hell of a lot of skull sweat and pounding my head against the brick wall until I broke through. @destriero's posts here were invaluable.

 

[ironchef]

I understand your frustration; it took me a hell of a lot of skull sweat and pounding my head against the brick wall until I broke through. @destriero's posts here were invaluable.

Good to know it can be done. I will move back to learn how to trade flies.

 

[.sigma]

Understand that you have exposure to Rates as well. Calculate the forward. Beyond that, make sure you're model is solid as your Vega (if DN) is your biggest exposure.

Love atticusdestpoopy terminology and thoughts

Lets say I think $SPY will be >$600/share by Jan 2025

Would it be better to trade a bunch of weeklies, every week, or monthlies, every month, or 4-5-6-7 months out and leverage it?

 

[poopy]

Love atticusdestpoopy terminology and thoughts

Lets say I think $SPY will be >$600/share by Jan 2025

Would it be better to trade a bunch of weeklies, every week, or monthlies, every month, or 4-5-6-7 months out and leverage it?

Shorter duration and roll bc you're not making a bet on implied vol. The point about rates is to show that the implied forward will impact your return in vol if short rates move.

LEAPS are best used to make a bet on implied vol in a changing rate-environment or to work short dated maturities against LEAPS (calendar structures).

 

[ironchef]

Shorter duration and roll bc you're not making a bet on implied vol. The point about rates is to show that the implied forward will impact your return in vol if short rates move.

LEAPS are best used to make a bet on implied vol in a changing rate-environment or to work short dated maturities against LEAPS (calendar structures).

Why may I ask?

If I think SPY will be > 600, I simply buy OTM expire in Jan 2025 and go fishing.

 

[poopy]

Why may I ask?

If I think SPY will be > 600, I simply buy OTM expire in Jan 2025 and go fishing.

Jans