Vol-trading for beginners
- Thread starter destriero
- Start date
Boys going to college or straight to trading?
He's in undergrad. He deferred a year to backpack in Europe. My youngest is going abroad for his senior year of HS (in the Fall).
Well, that would be a nice change of pace. Being back to only 4% or so below the ATH, after 6 weeks of hell. Of course, the rest of the week may anchor it back to a 13,000 support line. Buggers!
why not sell some 12000 guts? Just curious.
Shorting the 12K straddle as a hedge? It's not a bad idea as there is some juice in the strike. I bought the garbage combo before I understood what was happening (before hearing abt Goldman BWIC spoof). I covered my NQ short at 12,885 and went long deltas in SN and NDX. I bought futs at 12,940 as well.
IOW, I would not have kept your 12K bear combo with my change in outlook (bull) by the end of the sesh. The deep wings were cheap (notional) and not worth closing. Your bear straddle will probably get its face ripped off and it would be down on marks here. We were at the 12.800 figure as ADRs were basing. 12,800 to 12,960 close. Down on marks for sure on the 12K combo (lose on skew, gain on strips, lose on delts).
I think we have seen the bottom in China ADRs, assuming no crash in global stocks. I am reasonably bullish here to say 13,700-800 NDX. No color on SPX as I only trade vol on tech.
IOW, I would not have kept your 12K bear combo with my change in outlook (bull) by the end of the sesh. The deep wings were cheap (notional) and not worth closing. Your bear straddle will probably get its face ripped off and it would be down on marks here. We were at the 12.800 figure as ADRs were basing. 12,800 to 12,960 close. Down on marks for sure on the 12K combo (lose on skew, gain on strips, lose on delts).
I think we have seen the bottom in China ADRs, assuming no crash in global stocks. I am reasonably bullish here to say 13,700-800 NDX. No color on SPX as I only trade vol on tech.
I still like the idea, generally, into longer holds. Prem on 12K comho -> stress ATM combo at 12K combo vol-line -> stress day1 strike touch at new vol. You're going to have to be satisfied with the value on the stress knowing that the 12K skew figure isn't going to full compensate for a move down to 12K.
Sure, you're going to be up on price (delta sens) but the initial skew figure will not compensate your vega exposure (sens).