Atticus Thanks for the comeback and clarification. Hmmnnn! I´m thinking about what you said a bit. Some on here call me long winded, but it is just an attempt to understand better, as the common jargon by long term professionals and assumption, a novice like me understands the jargon intrepretation not clearly and often completely wrong. So I´m long winded because I feel uncertain and figure somebody better, will correct me when I´m wrong. That said, I understand your latest to be that the OTM Strangle is better than the ITM strangle, because the strikes are closer together and you would therefore have less road to travel to a profit? Will start doing that from here on. It is early Thursday morning and going to have a look at the option chain and see how you put on a long straddle that is Delta 25, + or -. At first when I read it, it seemed easy. But when I actually got to trying to figure out how to do it, it seemed confusing to me. Just going to see what is on the option chain now and how I can figure out how to do that. I´m presuming, before I try it, that you would more or less just go down the CALLS and find, when both the Delta on Puts and Calls would add up to your +, or -?
Atticus Well a look at the Option Chain clears that up. I figure you subtract the delta numbers of the puts and calls and get as close to what you want and that would give you the strike number of the STRADDLE. Simpler now, I can look at it. But thinking about it when away from the computer and doing something else it was mysterious. Thankyou very much for the two recent tips. VERY MUCH
nfamousyoungest I finally got around in TOS searching for Analysis to do your recommended search. Couldnt find it. Any suggestions? I use TOS Web trading platform
Cant get into Freestockcharts.com this morning. Wonder what their trouble is? Everything else working. Big Charts is showing the market weak, with no volume, or pressure to make a trend. Sideways action.
couple of notes for you, you were on to what vega is, The amount that the price of an option changes compared to a 1% change in volatility. The balloon analogy is a good one, compare the front month vol of Goog on the day before and after earnings to see what " volatility crunch" is, this is to do with vega, by the way most retail schlubs never get that far so you are making great progress. You also have a pretty good understanding of vol in general. Vol expands and contracts, this is why put sellers are all geniuses in a bull market, sell puts and you collect on direction, lower vol and theta.
Ha! Ha! ha! Market is slow this morning I guess. I was just napping in the hammock on the trading room verandah. Think I might just go downstairs and fry up some Breadfruit slices. Got a lot of fruit right now, it being harvest time. The only drawback, my wife says I´m getting too fat around the middle. That stuff is delicious though.
Well what do you know! Took a look at that spread and it is in the money by 4 cents. Give me another .30 cents or so, and might just close it.