I'm just running through all the normal strategies like most beginning traders in order to see their flaws/benefits. The only benefit to this strategy would be the astronomically high odds, like a lottery, for the index moving down 100 to 150 points in 8 days (I know it happens) and landing right in the middle of a narrow short butterfly. That's why I asked about the VIX, so that these kind of positions can be closed early if the market crashes without losing too much money.
Selling very deep OTM put SPX spreads
- Thread starter darkshogun
- Start date
I'm just running through all the normal strategies like most beginning traders in order to see their flaws/benefits. The only benefit to this strategy would be the astronomically high odds, like a lottery, for the index moving down 100 to 150 points in 8 days (I know it happens) and landing right in the middle of a narrow short butterfly. That's why I asked about the VIX, so that these kind of positions can be closed early if the market crashes without losing too much money.
1. As good as SPY.
2. Depends. Generally someone will bid if the structure is reasonable enough.
3. Options are like side bets in a casino. When two people agree on a price, a new contract is born. Market makers are like bookies.
4. Thousands of contracts can easily be traded in the SPX.
5. I offered my opinion on this already.
6. No.
2. Depends. Generally someone will bid if the structure is reasonable enough.
3. Options are like side bets in a casino. When two people agree on a price, a new contract is born. Market makers are like bookies.
4. Thousands of contracts can easily be traded in the SPX.
5. I offered my opinion on this already.
6. No.
You have to chose what works best for you, what you are most comfortable with, what you will be able to trade and not lose sleep over and not let your emotions overwhelm your judgment/trading plan
http://seekingalpha.com/article/528801-the-2-best-options-strategies-according-to-academia
SPX is not for the beginner/retail...do ES options
the biggest problem with the original thought is that you are risking a heck of a lot for a very little. yes you are "somewhat" protected with butterfly but just try and close one when you need to...GL
There are no MAGIC strats...you....YOU.... have to pick either direction..or volatility then place your trade that is best designed for it. All the basic books out there have the strategies that are commonly used, and no one can give you the perfect one for YOU. It just takes time and lots of trades to figure it out.
what NevedaBear said
the biggest problem with the original thought is that you are risking a heck of a lot for a very little. yes you are "somewhat" protected with butterfly but just try and close one when you need to...GL
There are no MAGIC strats...you....YOU.... have to pick either direction..or volatility then place your trade that is best designed for it. All the basic books out there have the strategies that are commonly used, and no one can give you the perfect one for YOU. It just takes time and lots of trades to figure it out.
what NevedaBear said
You are saying there is hardly any opportunity out there, and the opportunities that exist are meager at best. Risking money in a retail account on strategies that can only expect to return "bare minimums" seems silly to me.
And every month or so, somebody comes up with this amazing idea of free money.
Until the vix jumps to the roof and the broker eliminates your position at the worse possible moment, that is, when your account value reads 0.
Go watch some titties in a bar, it's much more educational and way more fun.
Until the vix jumps to the roof and the broker eliminates your position at the worse possible moment, that is, when your account value reads 0.
Go watch some titties in a bar, it's much more educational and way more fun.
Read this little thread. It will answer most of your questions.
http://www.elitetrader.com/vb/showthread.php?t=49586
http://www.elitetrader.com/vb/showthread.php?t=49586