Trading Long Straddles

Quote from DerivativesG:
You don't delta hedge frequently, you continually adjust your
delta hedge real time during the trading day.
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No you don't. Frequency of hedging is a very tricky question - would you hedge your book "continually" if you are short gamma? if you are long gamma? long gamma in a trending market?

Quote from DerivativesG:

Good for you. Obviously your one year of "market making"
does not make you an expert in all kinds of options market
making.
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However, experience of 15 years at a major investment bank and being a vol arb portfolio manager in a billion+ hedge fund does make me an expert. Now, I am not a equity options maven, but I have a guy sitting next to me who is an ex-MM in single name options and I just asked him:
sle: ***, do you know what "Income Trades" are?
***: well, I can guess what it is but I've never heard it before.

Quote from DerivativesG:
Of course you are either long
or short gamma and you follow the other greeks such as
vega, omega, theta etc. and that decision is so obvious, but
why are you telling us stuff that is options 101? What's your point?
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The point is that you (among other people) tend to mislead novices. My point was not to "know your greeks" but rather to "analyze your trades from the vol perspective".
 
Quote from falconview:

Very cute! Love it. All I know when I copied this down in my notes some 25 years ago, the return was touted to be 30% a year. I�m interested to see if it works?:D
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Not sure what you consider as "cute".
As long as you don't chicken out like your did with credit spreads, gap trading and long call, and have balls of steel, it'll work.
 
Quote from sle:

No you don't. Frequency of hedging is a very tricky question - would you hedge your book "continually" if you are short gamma? if you are long gamma? long gamma in a trending market?


However, experience of 15 years at a major investment bank and being a vol arb portfolio manager in a billion+ hedge fund does make me an expert. Now, I am not a equity options maven, but I have a guy sitting next to me who is an ex-MM in single name options and I just asked him:
sle: ***, do you know what "Income Trades" are?
***: well, I can guess what it is but I've never heard it before.


The point is that you (among other people) tend to mislead novices. My point was not to "know your greeks" but rather to "analyze your trades from the vol perspective".
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LMAO. I trade this everyday and I got my excel sheet here showing my "delta" real time and you are telling me what to do?

I have a total experience of 16 years at not ONE single investment bank but also a very famous MM and a hedge fund, I have one guy
sitting across me who is one of the most talented traders who
has been interviewed by many newspapers and magazines and
he has agreed with me.

I mislead novice people? LOL. Anyone told you that you are hilarious? I think you are the one who is misleading people here. A real trader examines EVERY important variable from volatility to greeks.

You sound like you are out for a pissing contest.
 
Quote from DerivativesG:

Not sure what you consider as "cute".
As long as you don't chicken out like your did with credit spreads, gap trading and long call, and have balls of steel, it'll work.
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what will excatly work ?
 
Quote from DerivativesG:

If he puts in enough time and effort, he will succeed with this long straddle strategy. Do I need to say more?
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Because of his nuanced understanding of vol, gamma scalping, theta decay, etc? The guy barely knows the difference between a put and a call.

The only responsible advice to him is forget trading straddles until he can trade the underlying profitably and has a clue about forecasting vol.
 
Quote from DerivativesG:

You sound like you are out for a pissing contest.
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But of course I am :D The whole point of posting on this web site is self-entertainment. Entertainment is important to me, especially now that my market is half-dead (well, today is a notable and pleasant exception).

I am still unclear why you would not buy a one month straddle. If you truly are a hero you claim to be, I'd love to hear your explanation.
 
Quote from AAAintheBeltway:

Because of his nuanced understanding of vol, gamma scalping, theta decay, etc? The guy barely knows the difference between a put and a call.

The only responsible advice to him is forget trading straddles until he can trade the underlying profitably and has a clue about forecasting vol.
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lol ; +100

Hey Falcon - forget options and start trading vix switches...

Shouldn't take you too long to "figure it out"

J/K
 
Quote from AAAintheBeltway:

Because of his nuanced understanding of vol, gamma scalping, theta decay, etc? The guy barely knows the difference between a put and a call.

The only responsible advice to him is forget trading straddles until he can trade the underlying profitably and has a clue about forecasting vol.
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No need to insult anyone.
Neither you or anyone is born with this knowledge, we all learned
as we went along.
He might barely know his stuff but he can still learn and educate himself.
 
Quote from sle:

But of course I am :D The whole point of posting on this web site is self-entertainment. Entertainment is important to me, especially now that my market is half-dead (well, today is a notable and pleasant exception).

I am still unclear why you would not buy a one month straddle. If you truly are a hero you claim to be, I'd love to hear your explanation.
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LOL :D Do fill us in. What is your market?

Because straddles on the underlying which I chose work if I give it 60-80 days.
 
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