Its akin to a crack whore asking a guy with 6 weeks to live to wear a condom before blowing him.... what's the point?
Literally suffering heartburn. (You're both wrong and I will tell you why when you post the position).
Well, I have been following this thread for a while and have been resisting the temptation to weigh in. But...I am bored at work and am going to risk a post on ET's forums. I've been selling iron condors for a while now and am managing several accounts using that strategy exclusively. I am not as smart or mathematically inclined as some of the posters on here, but I will say that I feel that there is a large gap between mathematical understanding and actual practice which results in profit. I just want to say this so that new traders who are exploring this concept are not scared away by apparent mathematical proofs either way. I strongly encourage everyone to do their own due diligence. For myself I can say that I have been a losing trader, then a break even trader and finally a winning trader only after I learnt how to sell iron condors. My 3 cents. Take care.
Out of curiosity (I trade rate vol mostly anyway, so i am not gonna "steal" your super-system), what delta strangles do you general sell and what delta strangles do you buy for protection? Also, when you say a while, how many years is it?
Would you be able to elaborate on this? I just made a thread asking something pretty similar. What short vol strategies are best if you know timing and direction e.g. if you anticipate a trading range with falling vol? Or if you anticipate a huge collapse in implied volatility, along with a drift in one direction? I find that often futures are not the best vehicle when trading direction. The reason is that in certain high volatility environments, you are so likely to get stopped out that you must take on large and potentially open-ended risk with outrights. In these environments, paying nosebleed premium still makes sense, because it allows you to take on more size whilst capping risk. It gives you 'staying power' during insane choppiness in the market. A good example is silver puts 2 weeks ago. Another environment where options are superior, is when IV is low, and you expect a very large move. The leverage in cheap OTM options is so great that you cannot hope to achieve remotely close to that in risk/reward with an outright futures position. This is especially true in longer-term positions, where even low volatility markets can grind 10, 20, 30% against you, stop out any outright positions, then move back and prove you right in the end. When you are right on timing and direction, long premium is usually better than futures IMO. Futures are best when you know the path as well as the direction, but not the timing. Options are best when you know the direction and timing, but not the path; or when you know the timing and path, but not the direction.