atticus, i don't post much, but try to keep up and read when i can. would you mind pointing me towards the thread where you posted these trades?
atticus, want to clarify above, using your example spot at $46, you are really buying 1 strike otm 45/50/55 flies right? And if your underly price target is say 55, you would buy 50/55/60 flies(2 strikes otm) instead? thanks
We have been through this before on the My option trades thread, OTM flies are useless - go with the 40c/45c/50c. With flies you want the volatility to drop so they are best before earnings and you don't want the stock to move too much after earnings. Try a 50c/55c debt spread.
THANKYOU VERY MUCH ATTICUS FROM THE HEART. REAL THING! ____________________________________________________ " ATM long flies if you're bullish. OTM long calendars if you're bearish. If you're right on direction you'll make very good ROC. If you refuse or can't accept a position that flips delta then go with verticals. Bullish XYZ. Spot at $46. Buy 45/50/55 fly or, Bull 45/50 vertical Bearish XYZ. Bear 40/45 vertical or, Bear 45/50 diagonal calendar or, Buy 42/42 calendar Buy 45/50 back-spread You want to be short vol + long delta on bull moves as index vol correlates downstream to single names, put simply. You want to be long vol + short delta on bear moves for the index correlation. You want to go into long straddles; then long flies; then single calls... you're fixated on the tool and not the job. The spread/combo is simply a tool. 90% of winning is being accurate on price (underlying) or vol. The advantage to vanilla options is that they're forgiving." Long straddles are not forgiving. You see this large premium and can't wait to get shaken out of one leg profitably, but then you're sitting on a prayer OTM shot at 20 delta or less. You take a non-directional gamma trade and morph it into a hail mary. Odds are against the 20D generating enough deltas, and wtf are you exchanging something generating a few -deltas into a hail mary call? It's a cautionary tale -- it's textbook of what NOT to do. STOP BUYING THE F*CKING STRADDLES. ___________________________________________ OKAY I STOP WITH THE LONG STRADDLES. ( grin ) STILL GOT TO GET OUT OF MY FOUR HOLDING LONG option LEFTOVERS THOUGH. I was reading on the internet trying to find if anybody did DELTA NEUTRAL, LONG STRADDLE scalping, using long option in short month and long option in further month? Couldn't find anything out about it. Sort of to shift the trade into another month, with more TIME? _________________________________ I'm beginning to understand the stuff you talk about now. THIS STUFF YOU POSTED ARE THE TRICKS OF AN EXPERIENCED LONG TERM TRADER, THAT GIVE MEANING TO WHAT YOU TRY TO ACCOMPLISH. IT'S GOING TO BE MY MANTRA! Glad I (novice) got to the point I can follow along. That said: was prepared this coming week, to do VERTICALS on BIDU, GMCR, NFLX and POT. I did it differently a bit. I started the Vertical, one strike above ATM. I believe it should work? The reason was, I didn't know how to do the expensive vertical from scratch, so just plotted the CONDOR and took the Vertical part. ( think I understand it now )I was very nervous about playing with the TOS platform with a vertical in my CASH account. In case I made a mistake. So opted to use a dormant web based paper money account, to place the trades for this week. I wanted to be sure I got the TOS platform entry and exits for VERTICALS right. Without costing me money. End of next week I should know. I think I got it right, but it took a bit of experimenting before I figured it out. Been reading up on DEBIT VERTICALS, but can't seem to find anything that tells me, if the Vertical is above the index ( CALLS ) at implementation and the index moves up through it ( debit spread ITM ), if that is the scenario when you max your profit, in this case should it pass through the sold side and reaches the higher priced bought side. Do I get my max profit? It is a bit confusing on the profit question, because with a 'weekly' you are going through rapid TIME DECAY happening at the same time of market action. Though in retrospect, I am supposing it is TIME DECAY I am shooting for and hopefully, delaying any actual possibility hopefully, of the Vertical being penetrated through by the index. Wanting the index to stay in a tight range. BEFORE I sign off this piece, I do want to say once again, how appreciative I personally am for the tricks and experience you have offered to me and us ( readers ) above. Worth their weight in GOLD that is. Time will tell of course. As a NOVICE, the shortcut on a steep learning curve is invaluable. You are to be congratulated. Very much so!
Yes to the 45/50/55 provided that the prem/delta value is lower than the 45/50 vertical. I would probably go with a vertical or 45-60 condor if my target was 55. I would buy shares if the expected hold was short.
Just checking in... hope Mr. Falcon and Atticus are doing well. Are you still beating the simplicity of options to death you guys, LOL. Ah, that's ok, no worries..... I smile when I read so much detail into such simple concepts.... I guess the actual "lightbulb" hasn't quite gone on yet... nothing negative meant, not at all. Good for you Atticus.... And, hey, I am hoping to be in Reno for Hot August Nights with my brother in law (two 56 Chevy's and my Caddy) - any chance of coming down for dinner as previously discussed? Aug 7-11 I think, let me know. Don
Got a question? I seem to remember something about being assigned a stock, if the sold side of a vertical, or other spread got penetrated. Is that still true as an assumption? I was pondering the recommendation, that the sold side of yours, should be OTM in a spread. Versus what apparently is a mistake on my part, doing four verticals ITM. Hey diaoptions. I'm playing with new thread forum title. How about "Tips, tricks of successful traders!" Are you a professional?