The Perfect Option position

Quote from highfreq:

This "POP" suffers from a "gamma hole" at the fly-wings. I can't imagine trading this thing; unless you're trading into the gamma/theta parabola into expiration. If so inclined, initiate this only with the front month trading <7days to expiration.

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Yes, you have to trade around this position just like any other. I try verticals around it. The gamma hole is pretty narrow. And I would typically use this only for stocks that I thought could make a big move. Like I said, I am mostly a short gamma trader so I kind of frown on long gamma positions to begin with. Just me two cents.

Mav
 
Quote from Maverick74:

Yes, you have to trade around this position just like any other. I try verticals around it. The gamma hole is pretty narrow. And I would typically use this only for stocks that I thought could make a big move. Like I said, I am mostly a short gamma trader so I kind of frown on long gamma positions to begin with. Just me two cents.

Mav
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I trade exotic energy derivs for a hedge fund, my nephew could model this sh^t on a matchbook; I think it's safe to say we all attended high school algebra, eh?

There is nothing here unless you're looking at a huge time spread edge(smile) or verticality(-ve skew). I don't see that in anything I'm trading. Biotechs, sure. But your flys are getting blown-out on every move and the curvature sux on the back-month.

The -ve edge alone makes the money hairs on the back of my neck go limp. Be afraid; be very afraid.
 
Quote from highfreq:

I trade exotic energy derivs for a hedge fund, my nephew could model this sh^t on a matchbook; I think it's safe to say we all attended high school algebra, eh?

There is nothing here unless you're looking at a huge time spread edge(smile) or verticality(-ve skew). I don't see that in anything I'm trading. Biotechs, sure. But your flys are getting blown-out on every move and the curvature sux on the back-month.

The -ve edge alone makes the money hairs on the back of my neck go limp. Be afraid; be very afraid.
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Yeah my cat could probably model this shit on a matchbook too. LOL. All I can tell you buddy is to each their own. I have adapted my trading style over the years to short gamma so I can't honestly say I trade this a lot. The primary reason I moved away from long gamma is because I am trading shorter duration now. Those positions used to tie up my capital for an entire expiration period which for me is an eternity.

You can talk about edge all you want, at the end of the day, the only thing that matters is the bottom line. I've made money trading those and not just in that form but in many derivations of that. If you can't make money trading a certain style or strategy my advice is not to trade it then.

I've said this on this forum many times, it all comes down to being a good trader. You can give somebody all the edge in the world, a bad trader won't know what to do with it. And vice versa, I've seen guys with all the negative edge in the world make a lot of money. The bottom line is do whatever works for you. But please do me a favor and don't come on here and tell anybody what you think will or will not work for them. Good luck with your exotic derivatives.
 
Quote from Maverick74:

Yeah my cat could probably model this shit on a matchbook too. LOL.
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It's not a matter of telling someone what will work; the position has no implicit edge, other than negative.

My nephew is 6yo; your cat must be pretty smart, and he can write to boot! You're a single guy with a cat, Mav?

I'm sorry I bruised your ego, but you can't polish a turd.
 
Quote from highfreq:

My nephew is 6yo; your cat must be pretty smart, and he can write to boot! You're a single guy with a cat, Mav?

I'm sorry I bruised your ego, but you can't polish a turd.
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Who said I was a single guy and actually no, I don't have a cat. My mother has it. Use to though. I wonder what alias you are. Give me a few minutes, it will come to me.

I bet your 6 year old nephew could teach you a thing or too about trading. LOL.
 
Quote from highfreq:

Alias? nah, a buddy from Wilmott told me about this board. Paranoid?
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No, it's just that strangers don't come here from other boards and just make an assumption about someone being single from an option post. That is the most bizarre behavior I've seen in a while and let me tell you, ET is the home of bizarre behavior, so I guess you get to take the cake.
 
Quote from Maverick74:

No, it's just that strangers don't come here from other boards and just make an assumption about someone being single from an option post. That is the most bizarre behavior I've seen in a while and let me tell you, ET is the home of bizarre behavior, so I guess you get to take the cake.
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Inference made from some posts I read in chit/chat which you've authored. I've been lurking here for a couple of weeks.

 
Quote from highfreq:

Inference made from some posts I read in chit/chat which you've authored. I've been lurking here for a couple of weeks.
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I don't remember any post on chit chat making reference to me being single.

And a word of advice, on this forum, don't pay attention to anything you read on chit chat. LOL.
 
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