In an interview MA said that SOME of his accounts are hedged (credit spreads, iron butterflies).
Writing Options on ES and SP (S&P Futures) instead of SPX
- Thread starter andysmith
- Start date
In an interview MA said that SOME of his accounts are hedged (credit spreads, iron butterflies).
I say perceived because I don't necessarily agree with those are afraid of prem sellers. But there's no denying that this negative perception exists among many in the industry
I remember once in early '90's I was sitting in an allocators office in La Jolla California, talking through potential managers. I was representing the Hedge Fund I worked for at the time.
When I mentioned AIM as a fund that I wanted to take a look at they looked at me as if I were some kind of space alien. I told them that I had spoken to Max on serveral occasions and that I was quite serious .....then that resulted in a polite 3 hour lecture on "follyâs of premium sellers."
What they didn't know is that I was already doing it for our accounts in ever increasing monthly size. And I was quick to notice that even as a still dangerous 3-4 year rookie in this business I had probably traded 10's of thousands more contracts than they had at that point.
If I remember correctly Max had less than 10mil AUM at the time and required only 15K as an account minimum.
BTW: Last I heard was that hot shot La Jolla allocator was in another line of work these days.
It's all good 'till it ain't.....Mr Neiderhoffer notwithstanding.
I remember once in early '90's I was sitting in an allocators office in La Jolla California, talking through potential managers. I was representing the Hedge Fund I worked for at the time.
When I mentioned AIM as a fund that I wanted to take a look at they looked at me as if I were some kind of space alien. I told them that I had spoken to Max on serveral occasions and that I was quite serious .....then that resulted in a polite 3 hour lecture on "follyâs of premium sellers."
What they didn't know is that I was already doing it for our accounts in ever increasing monthly size. And I was quick to notice that even as a still dangerous 3-4 year rookie in this business I had probably traded 10's of thousands more contracts than they had at that point.
If I remember correctly Max had less than 10mil AUM at the time and required only 15K as an account minimum.
BTW: Last I heard was that hot shot La Jolla allocator was in another line of work these days.
It's all good 'till it ain't.....Mr Neiderhoffer notwithstanding.
Quote from andysmith:
Dr. Z,
Interesting that you call it "perceived" risk
If Max's min size is $250k, his main investors must be high net worth folks with $40M on up who don't care about losing a couple of $Ms...
I have varied strategies for different markets, as anyone dealing in this area should. I find decreasing VIX environs to be more difficult. At least when the VIX is rising, you are getting paid more to roll out.
As Dr Z mentioned, funds who don't consider premium sellers are only hurting themselves. Few if any don't hedge in some form these days. This is not the old days of Vic N. et al. Firms like Zenith and Ansbacher and others are doing fine in all types of markets. There are others who have a bit more volatility who do fine as well. I think a lot depends on how much you want to shoot for. Zenith and Max seem to be aiming for about 20% so they can have smooth curves and low volatility. Others who are going for a higher number are going to have some potholes in the equity lines.
Hi,
I know it was asked earlier on this thread. But, is there anyway one could calculate the SPAN margin for a particular options spread? Is there some site people could go to get that information. I heard that Optionvue does it.
Thanks.
HAPPY TRADING!!
I know it was asked earlier on this thread. But, is there anyway one could calculate the SPAN margin for a particular options spread? Is there some site people could go to get that information. I heard that Optionvue does it.
Thanks.
HAPPY TRADING!!
Hi
I trade the SPY,IWM,DIA options apart from high value stock calls/puts.Mostly naked call/put betting on the direction of the move .Never a spread because I lack the patience.But unlike Equity options ,in the ETF options I boldly average ,increase size or take the opposite direction.
The question is -Is pricing,liquidity,cost of execution is better with the index options or the underlying ETF options?
I did see the post about tax on Index options/underlying ETF options.
I trade the SPY,IWM,DIA options apart from high value stock calls/puts.Mostly naked call/put betting on the direction of the move .Never a spread because I lack the patience.But unlike Equity options ,in the ETF options I boldly average ,increase size or take the opposite direction.
The question is -Is pricing,liquidity,cost of execution is better with the index options or the underlying ETF options?
I did see the post about tax on Index options/underlying ETF options.
I assume you don't want to fork the $500 to own the SPAN calculator from CME. IB, for example, have a "check margin" feature you can apply to an order before you submit it.
Yeah, that's what I was thinking about doing. I thought I would see what the margins for SP, though.
Aren't the options on SP more liquid then ES??
Thanks.
Another question.....
Are ES & SP options European (like $SPX) or American settled??
Are ES & SP options European (like $SPX) or American settled??