SLV Straddled Here

Quote from shortie:

SLV implied volatility is ~50 right now. i have very rudimentary knowledge about options, my intuition tells me that to sell SLV volatility now could be easy money. but what's the best way of doing this?

i am thinking of writing straddles at various prices levels as SLV is moving around in the coming months.

is May 20 2011 too close?

if i write straddles every 5% move in SLV is this a good strategy (e.g. SLV $40 i write $40 straddle, SLV moves to 42 i write $42 straddle, etc.)?

i will be purchasing Wings to protect myself if SLV decides to really go nuts. but let's focus this thread on straddle construction first assuming that the black swans are taken care of.
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If you have to inquire about the price you can't afford it.
If you have to ask what to do, you can't afford to trade it.
 
Quote from YuforaCapital:

If you have to inquire about the price you can't afford it.
If you have to ask what to do, you can't afford to trade it.
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not clear what you are saying
 
Quote from the1:
Not at all. It's also a measure of inflation and the Fed has to manipulate the markets in the interest of their earlier statement of controled inflation with the exception of the volatile food and energy prices.
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Whatever, man... Can we pls confine ourselves to a discussion of options here on this forum and leave the crazy stuff for the other places?
 
my position took another major hit this morning as SLV dropped yet another 5%. -136, may have gotten a bit worse later before recovering some.

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Unrealized PL in the last several days: -5 > -70 > -54 > +23 > +45 >-52 > -136
 

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Quote from shortie:

my position took another major hit this morning as SLV dropped yet another 5%. -136, may have gotten a bit worse later before recovering some.

Unrealized PL in the last several days: -5 > -70 > -54 > +23 > +45 >-52 > -136
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FWIW, had you been adjusting the position with each reversal (rolling profitable legs), you'd have a decent profit in a mere few days. Gamma scalping would have been ideal.
 
He's right, if you had traded the legs around you would have done better, but that's not gamma scalping. It's texas hedging. When the SLV was at it's local high you would be buying back your short put (effectively selling delta, when you are already synthetically short delta and short gamma).
 
Quote from spindr0:

FWIW, had you been adjusting the position with each reversal (rolling profitable legs), you'd have a decent profit in a mere few days. Gamma scalping would have been ideal.
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let me see if got this one right: i look at the Short option that does not have much juice left (made me money) cover it and Short the same kind (call or put) but closer to the price SLV is trading at that moment to get more credit.
 
Quote from newwurldmn:

He's right, if you had traded the legs around you would have done better, but that's not gamma scalping. It's texas hedging. When the SLV was at it's local high you would be buying back your short put (effectively selling delta, when you are already synthetically short delta and short gamma).
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I didn't mean to imply that they were one and the same. What I meant that adjusting the legs would have worked well. As a separate strategy, gamma scalping would also have worked well (for example, buy a long leg and scalp the UL against it, etc.).
 
Ah...

Being long gamma would have been a good trade; better than the butterfly. but I think he was looking to sell gamma via his butterfly.
 
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