thanks arbtrader,coach and others for your answers. Sometimes it hard to admit i am wrong because of my ego. But i am here to learn and make money, not to be right
Thanks Percy, 0.50 cents decay sounds better than 0.005. But I still think its too much for an OTM option. 0.50 x 10days = $5 Current option price ~ $3.20 I would understand better if theta is currently around 0.20 and increasing as we get nearer to expiration.
Grid anaylsis is my daily routine of taking an overall picture of the market. First starting with weekly, daily, 81 minute and then 15 minute. I see which timeframes are impulsing and look for confluence and divergence between the different timeframes. Looking at waves, overlapping pivot highs and lows and some other of my TA. The only indicator I use is 50 and 200 EMA, if thats the ma you saw. I suggest looking at some material from Robert Miner. His techiniques work on all markets, all timeframes and are perfect for getting optimum entry on these spreads.
Anyone has suggestions on Sep vertical or sep/oct diagonal? Is it better to wait till fed meeting? Should we continue to open new positions and ignore any news or events?
I am waiting for the FED before entering my next diagonal. I am looking at the Calls and the SEPT ES and AUG EW (end of month calls) on the ES futures options.
Question for anyone with diagonal experience (Murray - that's you): Assume my account cannot hold naked short options: If I am unable to buy in my short Aug options on Thurs, will I be allowed to sell out my long Sept options on Friday? I asked Interactive Brokers and they said no; then reconsidered and said that I 'should' be able to do so. I also asked the OCC and awaiting a reply. I ask because my broker will not release the margin requirment for the August calls until Monday. That makes me fear that they will not allow me to sell the Sep options until Monday. BTW, I will buy of my shorts that I can for 5 or 10 cents, but there are not always sellers at that price. Mark
The brokerage will traditionally hold the margin until Monday. However, once the settlement price is announced on Friday, you should be able to call your broker and ask them to release the margin. I use OX and they will do this on Friday.