Hello Sweet Bobby, Nobody gives a fuck that you finally finished reading Options for Dummies and now understand how to delta neutral your shit. Cheers
There is no hedge to what Karen the SuperCon was/is trading. The very structure she shorts ***IS*** the f*cking hedge. Skew wouldn't exist if skew could be arbitraged. Traders like Karen exist out of a unique sociopathy in which they will risk 10x their AUM and sleep well at night.
Here's a story from the '87 Crash that impacted me personally (as the son of a fuck-up). I started undergrad a couple of years early and had an academic ride, so my education was unaffected, but my dad was on the floor and blew-out when I was in grad school. He was working with a famous fuck-up who leased a lot of seats. These two (et al) were short tens of thousands of vega on any given day. They were in bear call spreads; bear put spreads; ATM flies; fences (synth bull spreads); and a shitload of local/neutral flies and long calendars. Saliba was the guy who was carrying like 70K flies in inventory and they all emulated Tony. So October comes to pass and I am at NU's Mag Mile campus and my dad pages me to get down to 440 S. He's buried in paper and I remember him screaming for a market in a 50-wide fly. It didn't matter what strikes; all 50-wide flies were bid at 5.00. At 15vol the flies were 30. When markets blow-up it doesn't matter what (bounded) short gamma you have--it's essentially worthless. They were short a ton of delta locally, but blew-up regardless.
Maple Leaf Capital is a HF making very decent returns by trading options: http://www.cboe.com/rmc/2013/Day2-Session-1BWexler.pdf Also related: "Absolutely. I am the trader for an RIA whose main strategy is selling weekly puts and hedging with vix. Manage about 55m in that strategy, avg volumes of 10-12k spy contracts (1-1.2k spx) per week."
I understand your intention of having an open discussion of various option strategies but I don't agree with this aversion of call-selling. Calls is just the flip side of puts. Why this aversion of selling calls? It is totally not justified and staying away from selling calls is denying yourself and anybody who invested money with Karen this super trader profit potentials unnecessarily.
http://www.wyattresearch.com/article/statistical-edge-billionaire-hedge-fund-manager-trades-options/ "His name is Jeff Yass and he runs the most successful options trading firm in the world: Susquehanna Investment Group." I am going to read this later so.... https://www.phillymag.com/articles/2009/08/26/beating-the-odds/ "formed Susquehanna in 1987. That fall, the market crashed. On October 19th — Black Monday — the Dow dipped almost 23 percent. That day, Susquehanna made several million dollars.Why? Why waste your money on something that’s so unlikely to happen? To Yass, though, it was a bet on cost vs. possibility — he didn’t predict the crash, but buying these extraordinarily cheap puts was analogous to going to a racetrack and covering an overwhelming majority of the possible combinations."
509 posts and only 36 likes. No one here respects your opinion. I would imagine you are a disappointment to your wife and family as well you asshole. Disappointment to mom and dad too? Living in their basement still? LOSER!
I'm not surprised that failure runs in your family. Loser dad equals loser son. That old apple don't fall far from the tree does it?