As I was saying, in the post RIGHT above this one. I am well aware, of all of the above. As I already stated I am well aware of what this is doing on a Gamma basis. I don't think either of us have said it (though you alluded to it) I honestly don't think there is a worse use of BP ... one could probably imagine, as what I am illustrating above. As I stated above (knowing someone wouldn't read it, but saying it anyway, so it was said ahead of time), I fully understand the Gamma / Vol on Index Options. And the 'juice'. You can't pull out the juice, when you need to, as you need to. It's why I already stated that I wasn't going to cover IVR yet. Of course ... it's nowhere near efficient enough use of Capital. Especially if you're going to go ahead and define the risk. As well as already mentioning that this is nowhere near the strategies that we run in Private Prop (We prefer more arb), and mentioning already in this thread what we are doing here, is by no means new, revolutionary, special or honestly ... even "smart". Of course, naturally if someone was going to run something even remotely similar to this? You could either fund it up to $250,000 ... then run undefined, better priced vol in specific locations, either in something like SPX where you can downsize, have better liquidity, or in specific higher priced names like GOOG, NFLX, the usuals that you can pull better juice out of. While simultaneously, keeping to the Non-Correlated topic, specifically looking for areas to be long Gamma, and using the capital efficiently to do so. And when the account grows over time, I'll probably switch to the Micros', and may do that very thing. However, as I already stated I'm simultaneously trying to illustrate Options, to people who are brand new. Heck, I worry I've lost a few of them, just with the statements I made above. I wouldn't be surprised to hear someone say, with even those statements: "I'm lost". That's what I am trying to avoid. As I already stated. They tend to go glassy eyed, and sorta check out. In the past, I have gotten through to a few of them this way, and they went on to understand more difficult concepts. And I have found over the years, that if you're going to illustrate Options? As we were saying earlier in the thread with BlueWaterSailor (he made the same intelligent observation) ... it's best to define the risk, and start them there, because newcomers get crazy with becoming addicted to thinking they are just "grabbing credit risk free" (aka OptionSellers) anytime they have BP to sell, and they get themselves in trouble. Fast. People finally do learn Options, and they get ... weird. Nutty almost. I've seen it happen a thousand times. As well? You have the problem, that if you are going to convey a topic? You can't really explain that topic fully, at first (there's actually a proof on that). Usually, when you convey information (this is done all the time, from what they teach grade-schoolers, and then what they teach High-School kids, and then what you learn in College) ... by default, some of what you explain, will be a little off. It has to be. Thus, why I already stated, when discussing distributions that "Well, that's not exactly the case, but we'll get to that later" At the same time, if it's one thing I've learned? You can't get new aspiring traders to let go of the idea, of having outright, trading it directionally. God, much less spreads, or pairs (" ...but I could make "more" if I just bought one of them! I'm losing on the other side, why would I do that?"). Heck, if I wanted to ... we could start discussing directional NON-Option Future Fly's on Tightly correlated instruments or term-structure. But that's not going to help anyone as it's more advanced, and I already know it. So it'd just be a vainglorious attempt to demonstrate what I know. Which is pointless. So I'm dealing with that. Most new traders can only think in terms of "Up / Down" ... Directional Outrights (Yes, that "green" and "red" was intentional ... sigh) Simultaneously trying to break ones who have said they have a hard time with options, to understand basic concepts Simultaneously trying to not discourage someone who doesn't have $75,000 or $250,000 to throw around. Also, on that score, I get sick of hearing people whine that if they have limited capital there is nothing they can do. Bologna. Especially in today's day and age. So doing all of that? Trying to appease each one of those variables, you end up with something that can work, with an inefficient use of purchasing power and capital. The biggest risk is in the beginning, because naturally, I'm flirting with a bad MAE. Meh. Naturally, a bad MAE aside in even a year, with regular Capital Contributions previously mentioned, and the probabilities? The risk is worth it, given the place I'm eventually trying to get them to. All trading is discomfort, and gambles, so it's best to get people used to that right up front.