I'm assuming you're trying initially to express a market neutral view. If so, there's no reason not to go with the ATM calendar and add another...
Long stock + long put = long call If you add any number of call spreads to that synthetic long call, you're always net long 1 call If your...
You're best bet is to rely on the empiric observation that iv tends to be greater than realized, and following that, concentrate on the subsets of...
Yup.
A diagonal is the sum of a calendar and vertical. It has the risks inherent in each of those positions. Any time spread has deferred month vol...
It's not so much that a double calendar is a disastrous trade. It's just a more expensive way to express a market opinion than the alternative....
The basic idea I'd suggest to new traders is to keep things as simple as possible and not over-commit to any one single position, whether it’s the...
If your opinion is that spot won't move, skip the double calendar. Instead, start with the ATM calendar or fly and add trades as appropriate.
In general, if you're assumption is limited movement in the underlying, then a single calendar at the relevant strike is a better trade than...
Just make the trade. The IWM is plenty liquid. No need to sweat details like the ones you're raising, at least at your stage.
If your guess as to over- or under-priced vol is correct (realized less/greater than entry implied), you choose your 'bands' correctly, and if...
Time for some basic reading.
Since you're a beginner, my suggestion is to buy a basic options text (McMillan) to read along with whatever you find on commercial sites on the...
I think the above is the essential element missing for half the comments in this thread. At the end of the day, we simply don't have enough...
You might not outright substitute one for the other, but you can think of synthetics being helpful when you want to change the nature of the...
As long as you can stomach the inconsistencies, no. But just understand that certainty in the VIX space is an illusion. All models are simply a...
mj- Can you tell us what your experience level is? Hard to judge from your questions. Are you interested in OTC markets or in the plain vanilla...
Typically the embedded short vert in a unbalanced fly influences your daily p/l more than you'd think.
yes
Tough to win this game. In addition to the theta decay, transaction friction can be hard to overcome if your trade triggers are tight.
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