this is the ultimate goal of this thread. For all of us as a collective to understand the nature of the butterfly spread. That’s why I need you guys to urge destrerio now “poopydeek” to unblock me so he can dismantle this thread in his cryptic but very interesting and Shakespearean (stoke that from @TheBigShort) posts about the butterfly spread. So guys, tell him I’m sorry and I love who he has potential to become! I’ve learned so much from his posts! Cheers!
I want to discuss the duration of fly spreads? What's really optimal, if any? Anything >30 days is a pure gamma trade, anything beyond that and Vega convexity plays a role. I see Dan Sheridan initiating butterflies with 45 days to expiration (DTE), also tastytrade advises this. They also advise to trade flies in high iv environments (which I agree on especially ever since the market tanked this year). I've been trading strictly the weeklies but just recently started trading farther out in the term structure and have been seeing decent results. Also of course the width of the wings plays a huge role. Guys I really want to dissect this insect (no pun) butterfly inside and out. From the short guts (bodydDgamma) to the outside wings (Vanna/Vomma). Tinkering with various constructions throughout the term structure AND vol strip. No I doing have a fancy vol model like @TheBigShort but I hope one day he can show me the ropes of how to acquire one since we're buddies (I think?). So for now I'm "trading vol" based off if I think the straddle is overpriced pretty much... what's the determinant for its expensiveness? No clue bro, it's just a bet to get some skin in the game and maybe bank some coin! But I definitely would love to trade vol efficiently one day.
Jesus guys, get riskarbatticusconvexxdownprufdestreriopoopydeek in here for heavens sake. I need some fly guidance. @Doobs789 @Same Lazy Element please add any insight on fly knowledge. sle I read somewhere where you compared a fly to some exotic option. Forgot the exact one, like a digital barrier or some shit. Atticus concurred so I’m wondering if you could expound on what you meant by that? Sorry if I worded this wrongly! cheers!
”You could think of a fly as a combination of two wide european digitals - you can be long both (if you are pinning the forward) but also you can be long one and short the other, which makes it a directional trade.“ - @sle Found the quote! @Same Lazy Element
Simply log out to see his posts. He has me blocked as well. Please forgive me in advance for characterizing your comments about the guy as worship. It seems to me it is not healthy to worship those who reject you. The guy does write cryptically apparently to avoid giving away too much information to the unworthy. By unworthy, I mean those who aren't willing to put the time and effort into learning this craft inside and out as well as those who are too lazy or stupid to reason. Think of the legendary sword of King Arthur, Excalibur: When we know enough about options and have maintained a high level of focus for long enough, we will be worthy enough to decrypt his posts and pull the sword of knowledge from the stone of this posts. How is that for hero worship? For now, we can look for edges in the volatility surface, either buying relatively cheap volatility, selling relatively expensive volatility and or creating indicators that have useful predictive value from changes in the volatility surface. We need to do back testing to either confirm or find an edge in the underlying and use options to maximize that edge. We all have a different view of reality. While there is much that can be learned from others, ultimately we need to follow our own path in trading. We all have our strengths and weaknesses. Tom Sosnoff is a great teacher and provides an impressive array of back tests, but he does not always have the sense to avoid dangerous situations such as in silver last year or the recent market sell off. It is not easy to have both a broad view and tight focus on the immediate. Anyway, let's get our pricing models up and running and develop custom scanning capabilities. Eventually, we will want to get into automation. In time, we will create an impressive track record through exceptional trading skill and money will soon follow.
I don't think "worship" is the right word man. Definitely don't worship Dest lol, I don't worship any man, except Enoch.. you know the Metatron dude lol But yes his posts literally fry my brain but I feel like I gain 0.0005% of some gems within his cryptic optionality.
Are 132 flies supposed to be initiated for a credit or a debit? Or does it matter? I'm a little confused still like a little sheep. I skip-striked this $GDX call fly. $GDX had a nice move up yesterday. I'm bullish/neutral. $VWAP is around $28 so lets delta bucket peg that bish. 26/28/32 @ -1.14
I'm trying to isolate or interpolate pt-1.... I need to use an options "speed" via LAMBDA, this hurts my head broski