<b>Risk</b>, the otm credit spreads have a higher % probability of success if managed correctly. You know very well that deep OTM options will bleed to 5cents in a heartbeat, while the credit spread has much more time to manage risk/reward. You also know that an atm/otm debit spread negates much more of the extrinsic than straight puts. Reality? Creating a straight bear-call credit spread or adding complexity to it is the highest-odds option play for downside DIA attempt. I'd personally trade the bull-put deep OTM spread and manage that before taking the deep otm long put outright buy. ** I'd be very happy to trade with you via a $25k or bigger account in any market = symbol. Whatever works for you is fine... I'll be trading the ER and 6E in controlled aggressive (vol) fashion myself.
Probability of profitable payoff has nothing to do with edge under your stated condition [modeling under black scholes]. I am referring to an fx account trading exotic options w.r.t. the trading competition. As a disclosure: I receive 100:1 haircut on spot and the options are traded at no haircut.
BS model assumes all option positions expire worthless, before trade costs. Understood. The scale of probability to success outside of that modeling has deep OTM options as worst, followed by debit spreads, followed by credit spreads. I'm guessing you trade spreads - exotic spreads because they allow you <i>most control</i> over the variables of risk. I would sooner take the bull-put deep OTM spread than a straight deep OTM put position. Wouldn't you? Which is easier for anyone to manage = repeat consistently for profit? Given the choice to advise, I'd trade the bear-call credit spread and manage thru rollouts in a rising market. Easiest repairs when done correctly until the market "behaves", in my opinion.
Risk, I'm familiar with FX options. I'm sure you'll do very well with them... the leverage offered is optimal for <b>experienced</b> traders. I never noticed any negative posts from you in this forum before, and always enjoyed yours. I'll be very glad to trade with you, but that of course would let all the vocal detractors here off the hook. Then they can sit back in their anonymous comfort zones, have no dog in the hunt at risk while enjoying their view behind the bushes. Let's have one more trader join us... any of the alias-hidden detractors to lay theirs on the line. If they insist on talking the talk, they must walk the line too. The whole purpose of this challenge is to have that chorus either walk the line under scrutiny of public, or respect me as I offer others respect. I'd welcome every single detractor into our little challenge, but will settle for any single one of them and we're on in ET public fashion. The minions cannot have their cake and eat it, too. <b>I'll assume the next person(s) to post negative comments in this thread likewise enter themselves into the live trade demonstration. </b>Thank you for the sincere offer, Risk... I'll gladly take it when one single detractor joins the party.
I agree. I think we need more partcipants to make this worthwile. Otherwise it's a even-odds crap shoot.
<b>risk</b>, when I tire of this intraday trade routine (it is draining) I will return to trading credit spreads, and the either/or FX options have great appeal, too. At that time, I'd be even happier to have you manage my funds while I do the important things (to me) in life: hunt, fish and work with wildlife habitat improvement. Staring at the screens is highly lucrative, but the sitting down indoors part is taking a toll. Some people really love it... I'm just here for the money any more.
have u read his post before jumpin' up and down like a crybabe, as u are doin'? he said he expected a drop from 11500 to 10950 in the space of 2 months and wanted to know the most profitable methods to play the tumble, without questionin' if the tumble may or may not happenn and in what space of time. i am no fun of lottery tickets but the guy just wanted to know how to play the crash, and for max profiability u buy otm puts that u liquidate when the underlyin' is close to the strike, the play is gonna maximize your profits, no butzz. as i said i dont like it and i'd never trade once in a life time multiple kinda event but it is besides the point. austin, i still think u are a fraud.
Bit, you might be right. I might be a fraud. In that case, what stops you from putting $10k where your mouth is and proving to the ET world what you ass ume? What do you fear, paisano`?