So I don't use stops and I think the math supports this.

Dunno, I'm not an expert in constructs with more than 2 legs.
Just this: there's no free lunch, there will always be a remaining risk.
Your approach in your OP was not bad: you have to work with probabilities, the more of them you bring into the range of 0.5 to 1.0 the better...
Since one cannot eliminate all of the risk, then it makes sense to concentrate on a specific range around the initial price: for example 1 to 2 SDs..., ie. ignore the extremes at both sides...
But this can be used only when one intends to keep the options till expiry, b/c then only the underlying price decides (as then IV no longer plays a role anymore).

Here's some code on how to calc xSD, ie. pass z=-1 for -1SD etc :

Code:

double calc_Sx(const double S, const double IV, const double DTE, const double rPct, const double qPct, const double z)
  {
    const double s  = max(DBL_EPSILON, IV / 100.0);     // must be > 0
    const double t  = max(DBL_EPSILON, DTE / 365.0);    // must be > 0
    const double r  = rPct / 100.0;                     // risk-free rate, earnings return etc.; can be negative
    const double q  = qPct / 100.0;                     // dividend rate; can be negative (CHECK)
    const double u  = r - q;                            // drift
    const double Sx_at_zSD = S * exp(u * t + s * sqrt(t) * z);
    return Sx_at_zSD;
  }

 

Options are a waste of time. Unless you are day trading them you can’t make money.

 

I've been saying this since day 1! Anybody with an ounce of technical analysis can see that its a racket.

 

Only if you are talking cash settled options, and the R/W is usually around 3x worse for credit spreads.

 

Ok so I just entered an Oct2 188 IWM call option. I expect to be out of the trade at 183/184 in the next 4 days or so. I actually don't mind being in a position over the weekend if I am confident in the direction.

No stop as always. I am planning on holding this position over multiple nights plus a weekend, during fed announcement...so a stop is useless. I accept the maximum loss in return for letting it run. I perhaps could have refrained from adding risk but to me the setup looks good (yes I see the H&S) so trying to capitalize on that. Even if I'm wrong and the fed dumps I still have enough time for recovery.

 

Did you tell @destriero your secret?

 

Well closed that for around $200 profits. Just goes to show you how crappy options are...even when you're really right. I could have held on for maybe $400 in the next couple days but too much risk on. Will go back to weekly ATM spreads.