Free left tail convexity. Am I kidding myself?

Discussion in 'Options' started by tman, May 20, 2023.

  1. tman

    tman

    Excellent idea. I'm a young boomer without crazy computer skilz. An idea I could implement would be a daily snapshot edited into a Youtube vid. I'm going to start capturing this tab daily and get one of my kids to assist. There will definitely be eye-rolling involved.
     
    #21     May 21, 2023
    spy likes this.
  2. cesfx

    cesfx

    The lines are set at 4 days step, I guess that is multiple expiration days.
    Have you tried to set that function on volatility step, 3 or 4 steps of 5%?
     
    #22     May 21, 2023
  3. Breakers must have just added to the horror. Like standing there frozen, unable to do anything as the giant anaconda creeps closer and closer and closer... :D:D:D

    Good shit for those who can sit on the sidelines with the popcorn.
     
    #23     May 21, 2023
  4. tman

    tman

    There is a lot going on in the TOS analyze tab. There are 4 lines each representing 7 days forward. The dates are color coded in the lower left of the graph.

    The breakdown in the lower panel shows that I'm losing 8 net long puts that will expire May 31.

    5% of what though?
     
    #24     May 21, 2023
  5. newwurldmn

    newwurldmn

    After the first 6 that you sold, are your risk graphs strictly long convexity?
     
    #25     May 21, 2023
  6. If you or your kids speak Python, I can share some of my finance notebooks. You can generate whatever plots or surfaces you want, and even animate them.

    upload_2023-5-21_14-43-44.png

    upload_2023-5-21_14-45-57.png

    [​IMG]
     
    #26     May 21, 2023
    tman, cesfx and spy like this.
  7. spy

    spy

    Plotly?
     
    #27     May 21, 2023
  8. ```import matplotlib.pyplot as plt```

    Although I've also been known to dabble in

    ```from mpl_toolkits.mplot3d import Axes3D```
     
    #28     May 21, 2023
    spy likes this.
  9. cesfx

    cesfx

    Volatility steps, instead of 7 days line step, you can select volatility steps, 5% increment (which might be default).

    As your highest risk is probably an immediate fast drop and IV spike.

    Screenshot (281).png
     
    Last edited: May 21, 2023
    #29     May 21, 2023
  10. tman

    tman

    No. I had bouts of short convexity until May 2022. Been long in that tail to varying degrees since then.
     
    #30     May 21, 2023