I was wondering the same thing. I suspect its similar to premature menopause that some of the women folk get with the passing of time. If true then it may be nothing more than a noxious long term side effect of watching the theta decay players (with or without trading skills) making easy money and not wiping out often enough. Give it enough time - it should clear up in 3-6 months. TS
I havent heard mav say a vertical traded at 1:1 or 2:1 risk reward directionally is a bad strat. In fact i am quite sure he has said a hundred times it isnt the strat that makes the money, its the trader. If you are earning nicely without exposing yourself to big draws, then you are going down the right path. That's not the case with cheap/naked gamma. If i get a chance later on i may type a long summary of the long gamma and short gamma approaches and how they can be used in isolation or combination so that maybe we can put this to rest but for now i shall retire myself from the discussion.
risk was taken out as you know. i think these discussions are great. some bits of good info comes out. as long as there is some tough skin here, things should be fine, although it seems like to me you and mav do like the sarcasm thing a little too much. i can take it though. additionally , if you think i "sell the premium and let theta do it magic" . i disagree wholeheartedly. we have different ways to trade. isn't a community like this partly supposed to showcase different styles thus allowing readers to study them?
In light of the recent posts going back bout 5 pages, here is my question that I have been pondering recently. What does 1 do in a 3+ sigma move if short premium? Can be ratio spreads, naked shorts, Coach's SPX credit spreads etc. While I know there has been discussion on black swans in this thread, not having seen the posts, and not about to go thru 1990+ pages, I will presume the discussion to be purely a warning. Eg. ' watch out for black swan', but not saying any ways to deal with it. Forgive my ignorance. I understand the difference between theo. risk and reality risk. Example being coach's short verticals. Coach assumes the risk of a circuit breaker type event because if he reversed his verticals, he would have gone broke already. While the collar rules helps to reduce vol, it doesn't protect vs an event that triggers a circuit breaker. And for most of us here short gamma, in whatever form, that event would have left us at a huge loss anyways. So that doesn't help. It's worse to the upside. My only conclusion is that while waiting for the 1% massive loss to happen the other 99% of the time I should have accumulated enough profits from being short but not naked gamma to weather out the drawdown. However you would agree this isn't very proactive. Hedging using futures isn't really an answer, as the event would occur instantaneously and the futures would be useless.
Boo-yah Kaashaan! 100x1310/1320 Dec put credit spread for 0.4. 4k or 4% return on 100k margin. That's friggin 60% a year! I'm only using 60% margin, just to be safe. Will have to settle for 33% per year. That's the price you pay to be conservative and sleep well at night.
domestic , you can call my posts sarcastic or any other names in the book. You are also free to ignore my posts all together , like I do with 99% of all option's traders on ET. It is not about me or you. I am one of the few (and maybe the only one) ET traders that buys long options (95% of the time). Should I jump and attack every time when I read following statements ? 1. Long is for losers 2. 90% of all options expire worthless 3. VIX to zero , longs losing their asses 4. You got the point I just smile because my PnL tells different story . As a retail trader , I found ET to be excellent place to get important info which is not available for outsider ( industry) like me anywhere else. There is only a few very knowlageble and WILLING TO SHARE/ANSWER posters here. Its took me a while ( after reading thousands of posts) to find out who they are. Lately , my "edit buddy list "is shrinking , because good members are leaving (for all kind of reasons) and I don't see any new comers taking their places. So when one of the good posters like Mav using a bit of sarcasm or whatever else he was accused of here in the last few days , do you think I care ? Would option's threads will be a better place ( for you and me) without Mav ? Its not up to us to tell him how to construct his posts , if some don't like it use the ignore button. I rather concentrate on WHAT he is saying rather than HOW. What really upsets me is when some egomaniacal WS "pro" that does not post often , does not share opinion/ideas ready to jump and attack posters that do and discourage them from posting . And you should be upset too , domestic.
Remote Market Makers are members of an exchange and on a seat and pushes quotes through the exchanges. A remote trader is just someone that trades from a remote location. Huge difference.