You can read more about riskarb's double butterflies here: http://www.kaininito.com/options/articles/ The problem with these is that right now, with such low vol, the middle of the double fly dips below the zero line....
Obviously there is more to it[abs vol] but regardless of vols the same strike otm combo fly is underwater at expiration at the middle, combo strike. Only way to avoid that scenario is to get the long call and put fly on at a credit or use a gut strike pair.
I went to the link. It looks interesting. But I have a question. How do you set up a butterfly with middle strikes $3 apart? I like how the profit zone is a lot wider in this type of trade. I know $2 strike difference is equaivalent to an IC. Ex.: Buy 33 Put Sell 34 Put Sell 36 Call Buy 37 Call Thanks. Daytrader85
Riskarb A quick question? In an earlier post you mentioned a friend you have from the CBOE named JS that made a very healthy sum in the OEX. Was he a First Op MM with the accro JIZ. Just wondered.
First Ops before SLK, yeah. Don't know what his acronym was, as I met him off the floor. I met him through a buddy who clerked for him as well. The clerk has the initials PM. Until now I thought his name was Silverman.
OK....this is getting a little WEIRD. I used to clerk for JIZ when he was at first op. MY initials are PM. It would of been about 1989 when I was 24 years old. Do we know each other??? You can private message me with the details.....
OK....this is getting a little WEIRD. I used to clerk for JIZ when he was at first op. MY initials are PM. It would of been about 1989 when I was 24 years old. Do we know each other??? You can private message me with the details..... His name is actually Silberman with a "b" He lives in Aspen now. They used his house in the movie, ASPEN EXTREME.
Hi Pabst, Is buying the friggin spread a +ve expectancy? Does buying breaks and selling rallies generate +ve expectancy? Only if you get the timing right. So, forget the friggin spreads, just trade the underlying!