Well, I don't know how you arrive at long otm options when I stated he only went short gamma/vega. He was only in defined-risk; so no, he didn't trade any positions requiring variation margin. I know a guy in Germany who turned a 10k account into 10 million over 6 years with zero outside funds or additions of any kind. He traded nothing but short gamma. Short gamma (and vega) can obviously be traded defined-risk.
you opened a can of worms here! he is correct in not explaining how he did it and continue's; but my 2 cents to add is... atticus was instrumental in making it happen. soon i think he will see how grateful that guy is.
looking at TLT 104/105/106 sep long butterfly thoughts, I am thinking we could see a touch of 105 in the next week.
the risk is potential also......every trade starts off with zero profit, most with immediate loss unless your timing is perfect
You get that $35 profit only of SPY is below 70 on the December expiration. SPY is just above 110 now so I wouldn't call that a forgone conclusion. You'll make money only if SPY is below 105, and I wouldn't call that a forgone conclusion either. Your position is synthetically equivalent to buying a debit put spread at 110/70. That will cost you about $5 and has the same risk/reward -- you lose $5 if SPY is above 110 and make at most $35 if SPY is below $70. When the trade is stated in terms of a put debit spread rather than a call credit spread it doesn't seem like such a sure thing anymore, does it? I would like to point out that almost all of the "premium" you're selling in this example is intrinsic value, which you capture only if the market makes a large move in the right direction. When people talk about selling premium they usually mean selling time value.
I don't care how good he is. I want him to explain just how his friend made a fortune shorting vega and gamma when the rest of us just eke out small profits (or blow up) doing that.