The payoff of an iron condor at expiration is not dependent on volatility, but the probability of a given payoff at expiration is.
Have patience, Artes needs to brush up on option basics (and communication in English) but he's otherwise harmless enough (if taken with a grain of salt) . db
Maverick, The edge would be something like a skew or the understanding of how to use IV ... What else other then a deeper understanding of public knowledge tools do you think the other professionals use? Are you implying that the ONLY way top houses can make money is by some inside knowledge that the rest of us don't have?
To hegde your positions, just sell short (STO) 7/10 short term call options [20/45 days to expiration] against LEAPS [8/10 monts to expiration]. Hedge Leaps calls with leaps puts. 7/10 of the leaps puts are free. Sell the leaps , into nice swings, when the expiration approach 2/3 months Buy [Leaps] time value , at the money / Sell [short term] with intrinsic value ITM Doiing this again and again, the reference : 1 if You dont like my english, see like 2.000.000 pages here http://www.google.com/search?sourceid=gmail&q=selling options against LEAPS and http://www.google.com/search?hl=fr&...e+the+two+legs+separately&btnG=Rechercher&lr= enjoy Your reading And if You learn correctly, smart enough, laugh in way towards the bank LoL
I hope Mav now realizes that the key to profitable option trading is the indiscriminate purchase of a ton of vega in LEAPS calendars.
Hi Atticus All this great IV and Vega, Delta too if You want ! .. You know... I call that .. "Greeks" !
Atticus: you should really try and learn this "greeks" he speaks of.... strange yet alluring information this is..
GMAT sounds about right for a fair amount of doctors practicing medicine today. .....But I believe the MCAT would be the exam required for admission into medical school. imo, A mentor can teach the mechanics of trading, but will never be able to teach how to handle the emotions, i.e. the feeling of a loss or how to swallow your pride. -Michael