I don't think there will ever be great clarity. It depends so much on the broker. The one I used before TOS would have you "buy" or "sell" to close ....or "buy" or "sell" to open. One reason TOS just has sell or buy is that they don't see a multitude of potential positions as specific positions. Say you have a book of puts and calls on the SPX....depending on how you arrange them you could have any number of transactions from IC's to B-flys' to verticals, calendars, or diagonals. Therefore for simplicity perhaps it is just easier to say when you are short (ie you have received premium) then you have a sell and when you are long (you paid a premium) you have a buy.
Simplicity works. Not arguing, just like the idea of universality. probably you are right and it's just not attainable. Thanks, Mark
With all due respect, what's with the capital letters? By the way, I do have my own approach to ICs, I wasn't asking for advice, so no need to tell me about my comfort zone and etc. I just wanted to see what risk/reward ratio that particular trade had.
I think my logic works pretty well for almost all spreads, except a diagonal, which sure does blur the line between long and short and buy and sell. If I'm not mistaken, when trading calendar spreads it is customary to define them with respect to what you are doing with the back month. So if you are buying the back month then you are buying the spread...
Today I received the "Option Strategies for directionless markets" book by Anthony Saliba. So I open it up and I see that he also refers to the iron condor where you short the body and long the wings as a long iron condor. Don't get me wrong, I'm not admitting defeat, I still think "selling" and a "short iron condor" fits it better, but I just wanted to be fair and post my finding.
You suggest a nomenclature possibility where you would be considered short when you have a credit and long when you incur a debit. Consider a diagonal. Using a LEAP instead of a 2nd month leg can change a same strike (different month) position fro a credit to a debit yet in both cases, the front month is being sold. So I think you have it right in that there will never be perfect clarity since there are always scenarios where it gets contradictory.
I wrote to the OCC, asking if they know of any definitive source for nomenclature. They know of none. Mark
why not a debit IRON CONDOR if 90% of the traders lose money why they keep doing credit iron condors and debit calendar spreads................ just my 2c
Interestingly enough, the CBOE's regulatory circular calls it a short iron condor (i.e. long the wings, short the body).
Why would you believe that 90% of iron condor traders lose money? I don't know which is worse - the possibility that you could believe such nonsense, or your attempt to spread that idea. Mark