Option Straddle

Discussion in 'Options' started by Lord Darkseid, Apr 27, 2023.

  1. spy

    spy

    It still works, no?
     
    #11     Apr 28, 2023
  2. Meh... not really. Now it's "visit lmgtfy.com and type <query>" - not nearly as amusing as in the past.
     
    #12     Apr 29, 2023
  3. spy

    spy

    lmgtfy.com? No, but what about letmegooglethat.com? That's the good/normal/old one. I tried lmgtfy.com and it's terrible.
     
    #13     Apr 29, 2023
    BlueWaterSailor and cesfx like this.
  4. cesfx

    cesfx

    Using your link here, it worked.

    When I clicked on the link that I generated and posted, it gave me the same strange query page that @BlueWaterSailor probably got.

    Maybe it was a temporary glitch. Funny website. :D


    Anyway, it would be good to have a thread to discuss straddles, strangles, verticals, diagonals, fly's.
    Lots of great theory and practice buried in the old pages and journals of this forum, but it's always productive to look at some real time action.


    Ooooops.... I didn't even notice!
    I was on Lmgtfy, which used to be like that too.
     
    #14     Apr 29, 2023
    BlueWaterSailor, Zwaen and spy like this.
  5. cesfx

    cesfx

    I am short a 4100 straddle for Friday 5th on ES, and I have some narrow wings for Monday. (Short double diagonal?)

    Might have to buy more tail and maybe re-centre, til fed rate on Wednesday.
     
    #15     Apr 29, 2023
    Zwaen likes this.
  6. Zwaen

    Zwaen

    I think - and correct me where i am wrong - one approach is to create some sort of expected probability payoff diagram from what you expect and basically build/optimize your structure around this. You probably already l did something like that, at last unconsciously. So i think the best starting point is to share your view for next week price path ( with probs for different price paths) and bounderies?
     
    Last edited: Apr 29, 2023
    #16     Apr 29, 2023
  7. cesfx

    cesfx

    Disclaimer: I am still learning and trying to understand volatility :D

    For what I have grasped here on ET, I understand it is more of a volatility than price view that I need with certain structures.

    I try not to look at price too much in terms of view and forecast.
    Although I do when modeling, picking wings, delta adjusting etc

    I sold 5th of may because IV was a bit higher on term structure, compared to other dates.


    Speaking of price and what to do if...
    This position has a couple of days.
    I had a similar structure selling the same date, and I closed for little gain when it tested a wing, on the rally, and I re-entered.

    Delta is slightly negative, so if price comes back to my straddle, I might exit for gain or buy more wings.

    If price keeps going up, I should be in gain around 4220 by Monday.

    Between 4180 and 4220 I would be suffering some drawdown, and I would look at either closing and rev-evaluating, buying more wings or re-center the straddle and hedge again.
     
    #17     Apr 29, 2023
  8. Zwaen

    Zwaen

    If i understand correctly you take a complete directionless view on price perse?
     
    #18     Apr 29, 2023
  9. cesfx

    cesfx

    Correct. At least I try to.
    Although I am not focusing on delta neutral adjustments. More concerned about tail risk, and understanding vega and IV changes and effect on premiums.
     
    #19     Apr 29, 2023
    Zwaen likes this.
  10. Excellent! Makes a good replacement for LMGTFY. Thanks! :)
     
    #20     Apr 29, 2023