I haven't got a clue what Dest says in his Journal, and it seems others don't too. So, an interpretation of his Journal might aid all. Can someone interpret these first three Posts please 1. 2. 3. Your cooperation is greatly appreciated.
1) An index RR is down-skewed. OTM puts trade over OTM calls. 2) Puts are the revenue side of the RR. Short put -> long call -> dynamic hedge (short spot). 3) OTM calls trade under all vols below (-skew) so that when spreading the call spread is the revenue side of the RR. 4) Flies are the ideal skew measure. 5) Arrive at an integer skew measure in lieu of vol-line/vol-edge. 6) Basis of developing a SS-down; SD-up skew model.
No, "risk" refers to split strike. Split meaning distance; hence risk. A bear synthetic = short call, long put at x. Conversion = bear synthetic + spot. Reversal = bull synthetic - spot.
Yep, I'm back from holidays and I'm booking another one leaving tomorrow. Does not matter how much I study options, I never learn anything. Thank goodness they made futures for the cheap seats.
If you really enjoy trying to make sense of meaningless ramblings and mumbo-jumbo, then you'll also enjoy the posts on this site of Jack Hershey. He managed to confuse gullible ET members for many years. Don't be fooled. If someone is not making sense to you, then they simply are not making sense. If you can't simply define a trading strategy in a few sentences, then it is not worth your time.
He's laid it all out for you, in astonishingly clear detail. Try taking it one sentence or phrase at a time. Understand that phrase fully -- google the terms or ask someone via pm (you must know at least one person here with some options knowledge!), then move on to the next phrase. Start with this: "Puts are the revenue-side of the risk-reversal as singles, but call spreads are the revenue-side when trading verts" Combined with this: "the fly RR needs to be over 2" Take the AJacobson post above to heart, it is 100% accurate. And Dest has just handed you, in the One Offs thread, the path to a large chunk of those available opportunities, especially if you take what he writes broadly.