What strategies do you guys use?

Quote from atticus:

Taleb distribution? I assume you mean fat-tails, Cauchy, etc. The problem is that CORN DIDN'T MOVE THAT MUCH. It's flat over the last ten days. You can't sell pennies in these commodities because the vol can explode on a single large order (in vol). Often you're as much or more exposed to the smile than outright vol... and you don't look at vol!

Inwestors still thrilled?
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James Cordier says in his writings that so far OTM options with extremely low deltas require a large move on the market for the option price to move much. I'd like to ask these guys about the things you guys brought up.

We test new strategies with the most minimal capital (1 contract orders) possible so a loss here wasn't hard to take. Just have to figure out how to make it work if it can work. The book made such a seemingly good case for it. And their reputation appears spectacular.
 
Quote from JSHINV:

Betapeg,

You mentioned a book. Its not the book you should start off with.

The best book on options trading is Option Volatility & Pricing, by Sheldon Natenberg. It was written in the late 80s (revised in the early 90s) but its still highly applicable. except maybe the ease of finding mispriced options using a retail broker's platform - not referring to options that are over priced because implied vol is expected to snap back down or underpriced because because implied vol is expected to increase.

Anyway, the book is dry, because the author deals with facts, very little opinion or emotion and he covers the subject very well. If you are like me, you'll have to read it more than 1x to get it. I am still reading the same thing again and again and I still haven't mastered it.

Another good book is Options as a Strategic Investment by Lawrence McMillian. This is a more a better read, because it is easier than Natenberg. But, if you master the chapters Mathematical Applications and Advanced Concepts, it is a good foundation.

Start with Natenberg first.
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I have Options as a Strategic Investment. The bible of option trading ;) Good pick. I'll check out that other book you mentioned. Thanks!
 
Quote from Betapeg:

James Cordier says in his writings that so far OTM options with extremely low deltas require a large move on the market for the option price to move much. I'd like to ask these guys about the things you guys brought up.

We test new strategies with the most minimal capital (1 contract orders) possible so a loss here wasn't hard to take. Just have to figure out how to make it work if it can work. The book made such a seemingly good case for it. And their reputation appears spectacular.
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You're relying on people who don't know wtf they're doing. Reputation for selling nickels and dimes? There is no skill involved and it's extremely reckless.

You could've received a much larger credit with a vertical and kept the risk limited.
 
Well Betapeg if you have read it, he warns against what you are doing.

Quote from Betapeg:

I have Options as a Strategic Investment. The bible of option trading ;) Good pick. I'll check out that other book you mentioned. Thanks!
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Quote from Betapeg:

I have Options as a Strategic Investment. The bible of option trading ;) Good pick. I'll check out that other book you mentioned. Thanks!
More...
Natenberg and McMillan are great reference books for options. A lesser known book that addresses many practical aspects of options trading is The Business of Options published by Wiley. The author, Martin O'Connell, is witty and good humored which makes it an easy read for mere mortals like myself.
 
So guys ? is it still possible to play long call or put in short term time frame ( for swing trading 3 to 5 days ) ? Does anyone here know how to do it ?
 
Quote from Betapeg:

James Cordier says in his writings that so far OTM options with extremely low deltas require a large move on the market for the option price to move much. I'd like to ask these guys about the things you guys brought up.

We test new strategies with the most minimal capital (1 contract orders) possible so a loss here wasn't hard to take. Just have to figure out how to make it work if it can work. The book made such a seemingly good case for it. And their reputation appears spectacular.
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far otm options with extremely low deltas can also destroy your account. there is also volatility to consider. and when you sell those far otm options it is likely the market will move against your position and you will either close the trade for a loss or wait out the drawdown and hope enough time passes.

all the traditional stategies can work but there will come a day when they come and take your money. very difficult business. i am only having success with one strategy even though i have to deal with drawdowns due to skews but its the only way i've seen to at least have a chance and sleep at night. and i can't give it away, sorry.
 
Quote from Betapeg:

James Cordier says in his writings that so far OTM options with extremely low deltas require a large move on the market for the option price to move much. I'd like to ask these guys about the things you guys brought up.

We test new strategies with the most minimal capital (1 contract orders) possible so a loss here wasn't hard to take. Just have to figure out how to make it work if it can work. The book made such a seemingly good case for it. And their reputation appears spectacular.
More...

Delta? And what happens to the delta when it moves against you? Which way does it go? And what about the rate-of-change of the rate-of-change of the delta? What about the sensitivity to a change in volatility?
 
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