cdcaveman
Registered: Aug 2011
Posts: 3514 |
09-03-12 04:56 PM
this is my real question.... i've learned of most options structures and their equivalents.. granted some are theoretically similar but yet still have different attributes... IE synthetic long, Synthetic straddles,etc.. etc..
So my real question is.. considering different account sizes and risk tolerences.. what is the best way to spread... .
list of short vol structures..
Iron butterfly
call fly
put fly
short straddle
short strangle
Condor
credit spreads calls or puts
Ratio buy writes
short calenders, long calender (depending where your predicting overpriced vol)
variable Ratio writes
short guts
long ladders
my question is.. what is the real difference even if its small on using puts instead of calls for butterflys... and whats the difference with Iron butterflys.. is there much of any to consider.. even on large numbers of combos.. ? there are so many ways to pick wings.. any theory on picking wing widths? say trades that last a few days with shorter wings, or very short wings and selling the butterfly, or wide wings on 2-3 month out back month expires to reduce sensitive to gamma..
one thing i know is.. the closer to opex the more gamma risk.. most everyone knows this.. so i would think to short butterflys with short wing spreads near term.. and open up the wings with back months..
so if you have a underlying that you feel is going to make a decent move .. you want the gamma exposure and you wanna sell the fly with short wings
if you think the underlying is just finished its power move your better buying a little wider fly that has more time to it..
i imagine all these things pertain to IC's to (iron condors)
to me short strangles and straddles don't have a risk containing factor and just aren't for me.. short strangles are in effect more efficient then straight naked calls because if you get blown out on one side you have the few pennys you picked up on the other side.. haha either way i dont' like that..
another question.. whats the advantage of in the money debit spreads instead of otm credit spreads... is there any?? whats the difference if any.. why buy a DITM debit spread rather then OTM credit spread..?
now this is the question for all the people that don't just short premium/short vol whats the best structure to get long volatility.. alot of guys here i know short tons of premium.. and the first thing new retailers do is take big shots to their accounts by learning about theta when buying premium ... does anyone trade long volatility??? and how
my only thoughts for trading long vol are
short butterflys with tiny wings when the underyling is trading right at the middle strike and you expect decent changes in the underlying price
and ratio backspreads.... DOTM or ATM
so you either hedge with the underlying and trade inside a ratio backspread to get gamma neutral.. gamma scalp..
or you trade for the tail event for a huge breakdown in a stock.. IE NETFLIX etc.. with backspreads..
or you just straight buy the super deep otm puts..
other long vol structures of note:
short call ladders..
wrangles.
so if anyone actually goes long volatility.. say something please..
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