@Saltynuts - Have you journalled your trades.
Can you show some examples? Best winners and loosers....?
Can you show some examples? Best winners and loosers....?
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Selling short straddles is like printing free money convince me I'm wrong
- Thread starter Saltynuts
- Start date
what you talking about its called hedging then you open two positions opposite each other to catch the trend especially before the news comes out and you not sure about price direction so you get in to make sure you don't miss the entrance. close the wrong position and keep other position. You lose on profit but you get some of it. To use this you need to have a bit of experience.
what you talking about its called hedging then you open two positions opposite each other to catch the trend especially before the news comes out and you not sure about price direction so you get in to make sure you don't miss the entrance. close the wrong position and keep other position. You lose on profit but you get some of it. To use this you need to have a bit of experience.
Yeah, I don't see how it can be too profitable.
Would love to see some actual trade log examples.
Each time you make a trade you loose some fees or some on the spread.
So if you are opening a a position on both sides, then you have those fees associated with it. Then if it doesn't move, you loose. Ideally it moves hard in one direction, so you have 1 looser and one winner.
But is it not better just to find a good entry and make a decision whether you go long or short?
If you play let's say 10 trades, then overall you would be better off?
Agreed if it doesn't move you lose. I've been trading a strategy on expiration day only of going long the straddle after the opening volatility ends around 10 EST. Usually is starts to trend one way at which point I close the losing side and let the winning side run. Granted it could reverse and be a loss but overall I've been profitable with this strategy that takes into account a discretional decisions.Yeah, I don't see how it can be too profitable.
Would love to see some actual trade log examples.
Each time you make a trade you loose some fees or some on the spread.
So if you are opening a a position on both sides, then you have those fees associated with it. Then if it doesn't move, you loose. Ideally it moves hard in one direction, so you have 1 looser and one winner.
But is it not better just to find a good entry and make a decision whether you go long or short?
If you play let's say 10 trades, then overall you would be better off?
Yeah, I don't see how it can be too profitable.
Would love to see some actual trade log examples.
Each time you make a trade you loose some fees or some on the spread.
So if you are opening a a position on both sides, then you have those fees associated with it. Then if it doesn't move, you loose. Ideally it moves hard in one direction, so you have 1 looser and one winner.
But is it not better just to find a good entry and make a decision whether you go long or short?
If you play let's say 10 trades, then overall you would be better off?
I personally don't do headging. I saw one of my friends did it on commodities but this strategy is more popular in Forex. Especially before news brake out, volumes are massive spreads unstable and you could miss entry depends on your broker. So you start hedging before the news announcement.
Agreed if it doesn't move you lose. I've been trading a strategy on expiration day only of going long the straddle after the opening volatility ends around 10 EST. Usually is starts to trend one way at which point I close the losing side and let the winning side run. Granted it could reverse and be a loss but overall I've been profitable with this strategy that takes into account a discretional decisions.
Example today in /ES playing the straddle in the options that are expiring I had two nice swings and picked up a couple hundred bucks. When it is expiration day the gamma in the position is the equivalent of being long / short the futures for a much cheaper price than the usual SPAN margin requirement. At expiration day it all converges but really not till the very end. The theta doesn't eat away the long straddle until the close and as long as you have some volatility and movement the odds of you buying the straddle at say the 3905 strike in the morning and it pinning there at 3:00 PM and experiencing max loss is rather slim.
You did a lot of hand waving claims without data to support them. It sounded logical, just like all the other claims, be it "Selling Options For a Living", "Doing Wheels For A Living", "Covered Calls For a Living"... So I ran an expectancy test using real SPY data and assuming a lognormal distribution with the current market parameters (i.e. BSM). The expectancy of your strategy is essentially zero without slippage and commission, independent of where I placed the straddle. I haven't done the calculations to incorporate your exit and adjustment strategy but my gut says if I use the same lognormal distribution and BSM, the outcome would be the same: No gains.
To make money you need knowledge, knowledge of the behavior of the underlying, the market, volatility, interest rate, dividend.... It would be a more fruitful thread if you could show us how you make adjustments with some real life examples.
Yea, I totally agree I have not data to support my claims. But what I am saying is that selling straddles is LOGICALLY, INHERENTLY superior to selling either calls or puts alone. It is a theoretical exercise. Compare a seller of straddles to EITHER a seller of a call or put alone. How much premium does the straddle seller collect compared to the other sellers? 2 times the amount (generally). But how much RISK does the seller of straddles take on compared to those other guys? LESS THAN 2 TIMES - because no matter which direction the stock breaks one of the two purchasers of the call/put are going to take at least some or all of that loss! Its a thought experiment, similar (in methodology, not topic. obviously) to Einstein using one or more thought experiments in connection with developing relativity theory.
Yea, I totally agree I have not data to support my claims. But what I am saying is that selling straddles is LOGICALLY, INHERENTLY superior to selling either calls or puts alone. It is a theoretical exercise. Compare a seller of straddles to EITHER a seller of a call or put alone. How much premium does the straddle seller collect compared to the other sellers? 2 times the amount (generally). But how much RISK does the seller of straddles take on compared to those other guys? LESS THAN 2 TIMES - because no matter which direction the stock breaks one of the two purchasers of the call/put are going to take at least some or all of that loss! Its a thought experiment, similar (in methodology, not topic. obviously) to Einstein using one or more thought experiments in connection with developing relativity theory.
Would be much easier to follow this is you had some data?
Also, how are you making the suggestion without the data?
I run all strategies through a backtest and paper account forward test.
I suggest the same for all new ideas.
Silly argument..You are comparing a Delta neutral strategy to a directional bet..Apples vs oranges..
Ill backtest straddle vs short call vs short put,but why not compare Fly structures vs calendars vs straddles??
Or short 90 percent spot strike Delta hedged vs ATM strike..
What you are debating makes no sense especially without backtest metrics..
Ill backtest straddle vs short call vs short put,but why not compare Fly structures vs calendars vs straddles??
Or short 90 percent spot strike Delta hedged vs ATM strike..
What you are debating makes no sense especially without backtest metrics..
Yea, I totally agree I have not data to support my claims. But what I am saying is that selling straddles is LOGICALLY, INHERENTLY superior to selling either calls or puts alone. It is a theoretical exercise. Compare a seller of straddles to EITHER a seller of a call or put alone. How much premium does the straddle seller collect compared to the other sellers? 2 times the amount (generally). But how much RISK does the seller of straddles take on compared to those other guys? LESS THAN 2 TIMES - because no matter which direction the stock breaks one of the two purchasers of the call/put are going to take at least some or all of that loss! Its a thought experiment, similar (in methodology, not topic. obviously) to Einstein using one or more thought experiments in connection with developing relativity theory.
Don't argue with an idiot. He pulls you down to his level and beats you there
He doesn't even understand half of the stuff you're stating here. Just let him try...he'll get blown out of the water on this markets first major pullback.
Silly argument..You are comparing a Delta neutral strategy to a directional bet..Apples vs oranges..
Ill backtest straddle vs short call vs short put,but why not compare Fly structures vs calendars vs straddles??
Or short 90 percent spot strike Delta hedged vs ATM strike..
What you are debating makes no sense especially without backtest metrics..
He doesn't even understand half of the stuff you're stating here. Just let him try...he'll get blown out of the water on this markets first major pullback.