ever hear of skew? if the market perceives/believes that the underlying has a greater risk of moving in one direction or the other the directional...
what has a chart got to do with probability? when i'm discussing probability i'm talking about the price of an option. at fair value, every...
i suspect that taleb uses money management and a variety of interest bearing vehicles to size and pay for his options portfolio. still, if his...
no i would not agree with this. i do not use the numbers to figure out where things are going. i use them to manage risk. at best, i make a...
i use both methods depending on the volatility of the underlying. if IV is relatively stable or declining i prefer to short the straddle first....
if you have a decided opinion on a market, there are always ways to use the greeks to create the best reward/risk scenario if your prediction is...
you're arguments are all very cogent and logical and i don't disagree or have a simple reply. but let me toss another thought (or half-thought)...
i don't know where you're pulling the vol numbers but let's say the numbers are accurate. it's still irrelevant because we are not quitting the...
expectancy is completely quantifiable and empirically validated. every trade has zero expectancy at fair value with no commissions. where i...
look, i have never denied that inefficiencies occur. they undoubtedly occur and they are also undoubtedly short term phenomena that make devising...
IV/HV has nothing to do with it. it's the same as saying there's a good time to be betting red and a good time to be betting black in roulette....
well there's the contradiction of this approach. maybe the only way i can explain or justify what i'm calling "converting negative expectancy...
the math absolutely matters. your comment is like saying you don't need to understand the probabilities in craps because, when it's all said and...
to me the simple answer is "when the new position has a net cost basis better than the identical trade created at current market prices." in my...
John, i'm up way too late alternating between a dvd of chappelle's show and this thread. i can't decide which is giving me more laughs. take care...
i would concede your point if studies could be found to support similar excess returns by put sellers (or for that matter any option strategy...
i don't think anyone who holds that markets are efficient claims that inefficiencies do not creep in every once and a while. the basic point...
but you have no way of knowing if there is a skew because some fund manager is protecting portfolio gains (and his job) or if some knowledgeable...
i guess that's what makes markets in the first place. likewise, thanks for your participation in the dialogue.
how can you possibly know this? do you have some data that shows you've found the optimal stop-loss level (i.e. you've tested all your stop...
Separate names with a comma.