Pabst's Blue Ribbon Trades

[atticus]

Quote from Pa(b)st Prime:

Ok I rolled 10 s CK 350c into s 10 June 400c at even( 7 cents each)

So in reality I'm short them at a nickel since I covered 10 May's at a 2.25 cent loss.

Corn wise then I'm long 10 CK against s10 CK 360c
L 10 CN vs. S 10 400 JUNE calls (fungible against July futs)

Right, June is marked to July. The time to sell gamma is to lock in gains, not as a repair strategy.

There is nothing stating you MUST sell synthetic straddles on rallies[options > futures]. Simply that it's prudent to sell skew and strip vol INTO the edge. When you get 15 handles, sell a call. Se another 5 the next day? Sell another call. You will stand an excellent chance of replicating a short put at an huge premium to the natural put-mark. Need to get flat? Buy the natural put [short-call strike] and you're good to go with one trade.

Don't do it if you're concerned it will increase trade-duration or unacceptably limit upside.

 

[Optionpro007]

Pabst could you tell us what your p&l is since beginning the journal..

Thanks.

 

[Pa(b)st Prime]

Quote from atticus:

Right, June is marked to July. The time to sell gamma is to lock in gains, not as a repair strategy.

There is nothing stating you MUST sell synthetic straddles on rallies[options > futures]. Simply that it's prudent to sell skew and strip vol INTO the edge. When you get 15 handles, sell a call. Se another 5 the next day? Sell another call. You will stand an excellent chance of replicating a short put at an huge premium to the natural put-mark. Need to get flat? Buy the natural put [short-call strike] and you're good to go with one trade.

Don't do it if you're concerned it will increase trade-duration or unacceptably limit upside.

Understood. Believe it or not I'm only underwater on 5 of my 20 corn. Beans are another story......

 

[Pa(b)st Prime]

Quote from Pa(b)st Prime:

Understood. Believe it or not I'm only underwater on 5 of my 20 corn. Beans are another story......

I'm going to sell 750 May calls in beans to-morrow and yea I am trying to "damage control" the Beans. IMHO this stuff is going to revisit all these 730-760 and 350-370 prices.

 

[Pa(b)st Prime]

Quote from optionpro007:

Pabst could you tell us what your p&l is since beginning the journal..

Thanks.

Yea I'm curious also. I've had some massive swings.

 

[Pa(b)st Prime]

Quote from atticus:

Right, June is marked to July. The time to sell gamma is to lock in gains, not as a repair strategy.

There is nothing stating you MUST sell synthetic straddles on rallies[options > futures]. Simply that it's prudent to sell skew and strip vol INTO the edge. When you get 15 handles, sell a call. Se another 5 the next day? Sell another call. You will stand an excellent chance of replicating a short put at an huge premium to the natural put-mark. Need to get flat? Buy the natural put [short-call strike] and you're good to go with one trade.

Don't do it if you're concerned it will increase trade-duration or unacceptably limit upside.

BTW: Thanks. Again.

I'm learning from everything you say.....

 

[Pa(b)st Prime]

Quote from optionpro007:

Pabst could you tell us what your p&l is since beginning the journal..

Thanks.

Including all open positions coming in to the journal and present open positions my trade p/l has been after commish +10,283 (it's obviously all Bonds although I was shocked that I've lost almost 4k trading around those Bonds. I'd forgot about a couple of UGLY adds.)

I found 2 Cotton trades and 2 Corn trades on my sheets that aren't in the journal. They were inconsequential (except one was a swap of 5 CK for 5 CN)

 

[Pa(b)st Prime]

Quote from atticus:

July is up big and has filled the gap.
I would consider scaling out of locking some deltas here at 393.

I can't help dwelling on this post.

I'd bet I've dropped 20k (I haven't a clue as to what my "open" equity was Sunday night) in Corn and Beans since you wrote this....

Also: Not to keep stroking you BUT because of your options expertise one tends to forget that you've had some awfully good "wise guy" calls in the indices the past couple of years. Unlike many options theorists you have solid directional ideas also.

 

[atticus]

You're referring to those three or four short/long index calls within a handle of the peak/trough?

 

[Pa(b)st Prime]

Quote from atticus:

You're referring to those three or four short/long index calls within a handle of the peak/trough?

Exactly. A couple were good for 15 SPX points the very next day.