If you nudge your position towards neutral delta during the trade, you'll end up leaning directionally as you add positions, so in effect you're...
Whoa, more than 50 posts about short strangles in 2 days. Maybe she just thought traffic on ET was slow and decided to add some juice? :eek:
If you're new to this, read atticus' explanation and then Google exercise and assignment. You're confused because you've assumed that you'll be...
Depends. What do you mean by "expected?" The relationship between the move and the straddle price is best expressed in Bayesian terms, not...
You'll have to configure a position with unlimited reward to mimic the long straddle, so you'll have to be net long option positions. One choice...
Discussing volatility is worthy of thousands of words of text. To be helpful to you, you'll have to tell us more about what you'd like to...
If you're going to change from directional betting to a more complex trading strategy, I'd suggest you pick up a few good option books and then...
Can you give us an example of this trade as well? Is this the same type of neutral delta position as in your first question?
There are lots of neutral delta positions. Can you give us an example trade?
You'll have to run the analysis yourself, but it's easy to do. On average, you'll find that as stat vol increases, the relative spread between IV...
Are you looking to demonstrate "what if" scenarios to a group of novices, or are you looking to place positions based on some mispricing revealed...
Agree. The OI on underlyings like these make your profit potential an elusion. Why let transaction friction determine your p/l? Trade the...
No.
You've gotten good advice about where to look for your risk. But if you modify slightly what you're doing, you'll end up doing what all short...
Since you're new at this, I'd slow down and read to excess before you burn 10 large. There will be plenty of trades you can make in your young...
Any one trade can win and any one trade can lose. No 'best' trade, statistically. On event trades you have to be right on vol, direction,...
Just wanted to be sure we were on the same page. Because the data source you have is rich with info. It's not the monster some have access to,...
Using historical data is fine for understanding the mean and variability associated with earnings, but I don't consider that out of sample...
Why can't you use your data source for out of sample testing?
Why are calendars excluded?
Separate names with a comma.