Hmm selling a strangle and buying the wings......
sounds like an Iron Condor to me....
sounds like an Iron Condor to me....
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Quote from optioncoach:
Hmm selling a strangle and buying the wings......
sounds like an Iron Condor to me....
Yes, but you are doing it synthetically which is pointless. Why not just sell the 1440 call and the 1360 put. Tighter spreads and more liquid!
Yes, I quit reading it before I got through it all. Another thing that was weird, is that he mentioned these "Siamese Condors". So I googled it and found the article.
http://www.sfomag.com/homefeaturedetail.asp?ID=1563109335&MonthNameID=September&YearID=2004
If you look at this "new strategy", it seems to me like this is identical to an iron butterly. Does this guy just rehash strategies that exist with a cool new name? I mean, Boston Strangler, Siamese Condors ... sweet names
http://www.sfomag.com/homefeaturedetail.asp?ID=1563109335&MonthNameID=September&YearID=2004
If you look at this "new strategy", it seems to me like this is identical to an iron butterly. Does this guy just rehash strategies that exist with a cool new name? I mean, Boston Strangler, Siamese Condors ... sweet names
Quote from optioncoach:
Hmm selling a strangle and buying the wings......
sounds like an Iron Condor to me....
Phil,
I think the method is similar to IV_Trader's "old" strategy. But Mav has pointed out during the discussion with IV_Trader that it is better to selling the OTM strangle instead of the ITM strangle. I am not going to elaborate on it, but you can do a search.
If Mav would like to do a favor for the readers here, he might repeat his reasons here.
[edit] I think IV_Trader used that strategy for volatility play (mostly for earnings).
That is the problem following strategies is that people devise their own unique names so that people look at it like their own strategy. All this is, is an Iron Condor with ITM v. OTM options.
This would work better on XEO or RUT where spreads are tighter than SPX. Or on ES options perhaps...
This would work better on XEO or RUT where spreads are tighter than SPX. Or on ES options perhaps...
Quote from spreadn00b:
Yes, I quit reading it before I got through it all. Another thing that was weird, is that he mentioned these "Siamese Condors". So I googled it and found the article.
http://www.sfomag.com/homefeaturedetail.asp?ID=1563109335&MonthNameID=September&YearID=2004
If you look at this "new strategy", it seems to me like this is identical to an iron butterly. Does this guy just rehash strategies that exist with a cool new name? I mean, Boston Strangler, Siamese Condors ... sweet names
By the way, it may not have been clear that what I was doing was summarizing what was said in the article and exploring the comparison. Did not say I was going to do these or switch everything over to them. When two positions are synthetic equivalents often there realistic differences (spreads on the options) or personal advantages of choosing one over the other (i.e. covered calls v. naked puts).
Mav,
Your insight has given me an idea. Clearly, liquidity and wide spreads among various synthetic constructs implies an equivalent inefficiency in option prices. Do you know of any scanner software packages or trading tools that can scan real-time price data using various synthetic equivalent trades for an arbitrary underlying and generic strategy (e.g. spread, strangle etc) and discover the best way to "tweak" out a better price advantage?
It seems to me this would be a very valuable tool for active traders to have and would not be all that difficult to program. Since I have an enormous amount of software engineering experience background I am thinking this might be something worth developing for my own use and possibly even marketing it.
What do you think?
TS