The incomplete wing strike doesn't decay much, and isn't terribly sensitive to vol. You lose on gamma curvature if the market moves against you. Feel free to start a backspread journal. The intent was to initiate a neutral delta position. You'd need to trade an otm ratio to receive a small debit or credit and remain flat deltas.
Riskarb's combo to fly conversion journal
- Thread starter riskarb
- Start date
The incomplete wing strike doesn't decay much, and isn't terribly sensitive to vol. You lose on gamma curvature if the market moves against you. Feel free to start a backspread journal. The intent was to initiate a neutral delta position. You'd need to trade an otm ratio to receive a small debit or credit and remain flat deltas.
If you have a directional bias then I'm not sure it would make sense to subsequently convert into a fly.
If whilst holding the ratio spread in inventory and circumstances changed and your sentiment turned neutral then a conversion could be warranted but to put on ratio spread specifically with the intention of converting sounds a little schizophrenic in sentiment terms to me. JMO though, whatever rocks your boat.
I think the thrust of this journal is to keep it KISS and to SPECIFICALLY convert to fly whilst harvesting opportunity gains. So the fly is the INTENT rather than the reaction. Riskarb can confirm/deny.
Shotgun approach. Market/Delta neutral. Diversified portfolio. Balanced flies. Simple....even I can follow along!
Speaking of which, smells like that time of the week to see what Bloomberg has to say? Riskarb?
MoMoney.
If whilst holding the ratio spread in inventory and circumstances changed and your sentiment turned neutral then a conversion could be warranted but to put on ratio spread specifically with the intention of converting sounds a little schizophrenic in sentiment terms to me. JMO though, whatever rocks your boat.
I think the thrust of this journal is to keep it KISS and to SPECIFICALLY convert to fly whilst harvesting opportunity gains. So the fly is the INTENT rather than the reaction. Riskarb can confirm/deny.
Shotgun approach. Market/Delta neutral. Diversified portfolio. Balanced flies. Simple....even I can follow along!
Speaking of which, smells like that time of the week to see what Bloomberg has to say? Riskarb?
MoMoney.
beaten to it again...
OIH and ACL still on the table after my sale, riskarb what has your screen come up with. What are your thoughts on ACL?
Yes, good call on OIH so far btw. Bounced off 145 to close at 150.
Don't normally post my own trades as I'm waiting for my own journal to do so ("Disaster Trading Inc." is my working title) but I'm keeping you company on OIH. Looking to convert by end of next week latest though, don't know what your time frame is.
Was expecting Riskarb to crank the handle on Bloomberg and spit out some tickers today. This is my comfort zone for butterflies with respect to days till expiration.
MoMoney.
Don't normally post my own trades as I'm waiting for my own journal to do so ("Disaster Trading Inc." is my working title) but I'm keeping you company on OIH. Looking to convert by end of next week latest though, don't know what your time frame is.
Was expecting Riskarb to crank the handle on Bloomberg and spit out some tickers today. This is my comfort zone for butterflies with respect to days till expiration.
MoMoney.
Grrr...he always comes and posts as I'm typing mine.