to circle back to something you said above, about selling options where vol is understated, i'm typically basing strike selection on the shape of...
so, how do you view a situation where an ATM spread with equidistant strikes is marking at less than 50% of the spread width? isn't the ATM...
not a fan of rolling either... feels like kicking the can down the road, just like you said...
you don't believe in holding indexes long term?
chasing skew will do that, for sure.. i just use it to guide my strategy selection.. i approach trading from a statistical mechanics perspective,...
ahhh word, this is one of my go-to strategies.. the reduction in cost basis on the long call makes them extremely interesting, plus the time...
not saying it's easy money, not at all, not even close.. the increase in tail risk alone from trading skew is enough to make most people who trade...
+1 i think it kinda went past me first time i saw it, or i'm one of the ones who doesn't get the trade lol.. but, diagonal put credit spreads...
hahaha fair point.. sorry again for the thread jacking lol
perhaps this is a confusion about directional vs arbitrage trading? on conversion/reversal for locking up the arb's, yes, you're 100% correct.....
in the case of the $223 put vs buy-write, the dividend payment (est. $0.392) would offset it but only by maybe 60% or so, and that's assuming the...
this is the clarification on the point i was trying to make..
not trying to be right, i'm trying to learn.. that's why i keep asking questions and dropping examples to clarify.. not to debate the point with...
even were you to fill your long at the ask and your short at the bid on that IWM example you'd still have a cost basis reduction - again,...
to the first, i totally get that.. i guess what i'm trying to get at is that if you're doing directional trades with risk, not arbs, then the skew...
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