The Beauty of Options - Portfolio Insurance at a Discount

[ironchef]

Buy a deep OTM condor... You'll see how easy it is to improve on what he's holding.

Thank you. I appreciate you taking the time to explain. It will be on my to do list to look carefully at what you commented.

 

[shh]

Here's a simple long condor normed to his max-loss. $28. 8x debit good for $155K terminal PNL on the table.

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Fairly speaking, Dest has a valid point. The structure designed by Sweet Bobby, requires layers on layers of positions, and if dissected properly, it might contain many redundant positions that are pretty much counter balancing each other and not helping the net portfolio profile. 0.10$ slippage on each execution multiplied by average 180 positions in and out every 2 months, and the costs add up pretty fast.

 

[Sweet Bobby]

Fairly speaking, Dest has a valid point. The structure designed by Sweet Bobby, requires layers on layers of positions, and if dissected properly, it might contain many redundant positions that are pretty much counter balancing each other and not helping the net portfolio profile. 0.10$ slippage on each execution multiplied by average 180 positions in and out every 2 months, and the costs add up pretty fast.

Dest is clueless as to the particulars of my strategy and is not man enough to unblock me so that I can see his comments!

 

[Sweet Bobby]

My cost for the hedge of 57 short puts and 130 or so long puts so far is around $1,900. I'm happy with that and soon that number will be below zero. How does Sweet Bobby do it? One amazing dude!

 

[.sigma]

Apparently dorky destriero has blocked me from seeing his posts, but I can see that he posted something on my thread. I'm sure his comment was not kind towards me. Would someone please let him know if he's got something to say, he can say it to my face.

Thanks!

Sweet B

I can’t see dorky dest either, but I’m sensing he’s destroying your strategy with its synthetic counter-part, in a witty exotic way lol

 

[.sigma]

Fairly speaking, Dest has a valid point. The structure designed by Sweet Bobby, requires layers on layers of positions, and if dissected properly, it might contain many redundant positions that are pretty much counter balancing each other and not helping the net portfolio profile. 0.10$ slippage on each execution multiplied by average 180 positions in and out every 2 months, and the costs add up pretty fast.

of course if you word it that way it sounds horrible.. but what if those layers of positions are only redundant “x%” of the time?

Also the commission argument is another red herring.

 

[destriero]

Fairly speaking, Dest has a valid point. The structure designed by Sweet Bobby, requires layers on layers of positions, and if dissected properly, it might contain many redundant positions that are pretty much counter balancing each other and not helping the net portfolio profile. 0.10$ slippage on each execution multiplied by average 180 positions in and out every 2 months, and the costs add up pretty fast.

He's short the diagonal/backspreaded. It's mind-fukcing dumb. Yes, I can dissect it as I went to high school, but it's pointless. The guy is a train wreck. He's the guy looking to short 50K notional in calls and sells 1000 of the 10 wide verts in lieu of 100 of the 100 wide.

 

[.sigma]

I meant it to be more of as a complement, but obviously it didn't come off that way. So I apologize. What I really meant to say is that I would rather be stupid, lucky, and rich....than smart, bitter, and poor anyday. So there's no shame in not knowing the nuances and details of option skew behavior. If you're strategy is making bank while others are losing their shirts, you will always have the last laugh.

This post really gets ones pondering.

I wonder often if consuming too much øptionality knowledge could hurt ones abilities to actually trade? A lot of people get caught up in 7th moment distributions but can't mint coinage. Maybe less is more, for some? I guess it all depends. You have desty who can trade very well plus is an encyclopedia for anything øptionality. But then you got the dude across the street selling cash secured puts monthly and banking greenbacks. It all depends.

 

[Sweet Bobby]

This post really gets ones pondering.

I wonder often if consuming too much øptionality knowledge could hurt ones abilities to actually trade? A lot of people get caught up in 7th moment distributions but can't mint coinage. Maybe less is more, for some? I guess it all depends. You have desty who can trade very well plus is an encyclopedia for anything øptionality. But then you got the dude across the street selling cash secured puts monthly and banking greenbacks. It all depends.

Hello Sigma,

You've been following my strategy for some time. How many times have the options ”gurus” predepicted the demise of Sweet Bobby? Yet, Sweet Bobby continues to bank the bucks! They lack the guts to trade like I do. I set my risks and go on about life. You know how this story ends.

SB

 

[.sigma]

Hello Sigma,

You've been following my strategy for some time. How many times have the options ”gurus” predepicted the demise of Sweet Bobby? Yet, Sweet Bobby continues to bank the bucks! They lack the guts to trade like I do. I set my risks and go on about life. You know how this story ends.

SB

Bob, you fail to realize your strat will IMPLODE... eventually. In the long term you are doomed bro! Whatever that means lol