Long dated buying

Discussion in 'Options' started by .sigma, Jul 15, 2024.

  1. I can get a payoff of infinity with a zero-cost backspread. Does that count? :sneaky:
     
    #21     Jul 22, 2024
    ironchef and cesfx like this.
  2. For spreads, I wouldn't call decisions about width "forecasting". It may be driven by margin considerations, or the average range for the tenor, or the amount of risk I feel like taking on a given trade. That's quite different from the "working" strike.

    It's not, of course; I used shorthand in the hope you'd understand. You did. :)
     
    #22     Jul 22, 2024
    Zwaen likes this.
  3. I understand your frustration; it took me a hell of a lot of skull sweat and pounding my head against the brick wall until I broke through. @destriero's posts here were invaluable.
     
    #23     Jul 22, 2024
    .sigma likes this.
  4. ironchef

    ironchef

    Good to know it can be done. I will move back to learn how to trade flies.
     
    #24     Jul 22, 2024
    BlueWaterSailor likes this.
  5. .sigma

    .sigma

    Love atticusdestpoopy terminology and thoughts

    Lets say I think $SPY will be >$600/share by Jan 2025

    Would it be better to trade a bunch of weeklies, every week, or monthlies, every month, or 4-5-6-7 months out and leverage it?
     
    #25     Jul 26, 2024
  6. poopy

    poopy


    Shorter duration and roll bc you're not making a bet on implied vol. The point about rates is to show that the implied forward will impact your return in vol if short rates move.

    LEAPS are best used to make a bet on implied vol in a changing rate-environment or to work short dated maturities against LEAPS (calendar structures).
     
    Last edited: Jul 26, 2024
    #26     Jul 26, 2024
  7. ironchef

    ironchef

    Why may I ask?

    If I think SPY will be > 600, I simply buy OTM expire in Jan 2025 and go fishing.
     
    #27     Jul 30, 2024
  8. poopy

    poopy


    Jans

    upload_2024-7-30_12-4-57.png
     
    #28     Jul 30, 2024