Hedging the wheel

Discussion in 'Options' started by markthepadrone, Sep 16, 2022.

  1. destriero

    destriero

    If you're going to short upside calls then add some leverage and shoot for neutrality. Buy 100 TQQQ -> short two 20D calls -> cover with wings on a strike touch at a net-credit -> rinse, repeat. You'll "own" synthetic flies at a large arb-credit (equivalent 10-wide natural fly for say, a credit of 30 cents) and it can be repeated indefinitely as you're trading house money. The fly at a credit means that you're available cash is greater than before you were carrying a position.

    Conversely, do a D1 fly. Long TQQQ -> short two OTM calls -> long one further OTM call. Re-evaluate on strike touch.
     
    Last edited: Sep 16, 2022
    #21     Sep 16, 2022
    cesfx likes this.
  2. destriero

    destriero

    Not CC

    Screenshot_20220916_140722_thinkorswim.jpg
     
    #22     Sep 16, 2022
  3. Oh, bullshit. Sure, there are a few people here - as anywhere - who are rude without cause, but in general, most here are quite helpful to newbies. I don't recall anyone being especially rude to me when I started here, and I didn't have the slightest clue.

    You couldn't understand why? Here's your BIG CLUE: it's your arrogant, entitled, prickly, prickish attitude in the second sentence above. It's not an uncommon one among people new to financial forums - and it causes people not to like you, and to respond to you in a similar fashion.

    Newbies who are polite, humble, willing to listen, and don't fly off the handle when they see someone disagreeing with them (or even telling them they're being foolish when that's the case) generally don't have any problems. I've been here a few years, and have seen this again, and again, and again.

    P.S. And here's @destriero - one of the sharpest people on this site - proving my point. Told the newbie he was being foolish - and gave him excellent advice that would take you years (if ever) to figure out on your own. But yeah, it's all Big Blue Awful Meanies here, waaaaahhh...
     
    Last edited: Sep 16, 2022
    #23     Sep 16, 2022
  4. Just for curiosity's sake: what would you do if you get a strike touch early on? Seems like it would be a straight-up loss at that point, right?

    P.S. Whoops, never mind. Forgot about the gain from D1...
     
    #24     Sep 16, 2022
  5. destriero

    destriero

    And spot/vol-corr should result in a gain on vol-line.
     
    #25     Sep 16, 2022
    BlueWaterSailor likes this.
  6. Damn. I haven't done any CCs in quite a while, but this looks like it would be worthwhile on its own. Come to think of it, I've got some loose cash sitting in an IRA... the only trick here would be finding an underlying that's not going to hell in a handbasket in this market. Maybe something RE-flavored...
     
    #26     Sep 16, 2022
  7. newwurldmn

    newwurldmn

    ha. either he won the powerball the next day or got hit by a bus later.
     
    #27     Sep 16, 2022
  8. Overnight

    Overnight

    Nah, he got comped a room and a whore, so he would be enticed to come back another time and lose another 150K. Who the hell martingales a roulette wheel? You'd have better luck doing that in blackjack.
     
    #28     Sep 16, 2022
  9. destriero

    destriero

    I played Revere APC for years as a member of a group. Table limits exist to kill martingales.
     
    #29     Sep 16, 2022
  10. M.W.

    M.W.

    You can't hedge anything when you get assigned, it's too late by then. Imagine you sell calls on equities and it jumps 40% or more outside rth. What you gotta do then? You get assigned and whatever hedge you put on then is useless.

     
    #30     Sep 16, 2022