Writing options for a living

Discussion in 'Options' started by torontoman, Jul 28, 2005.

  1. MAESTRO

    MAESTRO

    Can I pre order? Where should I sign up? :D
     
    #801     Mar 31, 2006
  2. You can find the answer on realforextrader's journal. Evidently he recieved a less than desireable PM after a disagreement on a journal. He lashed out on the realforextader journal. Too bad. I liked having him around.:(
     
    #802     Mar 31, 2006
  3. realforextrader journal ended up being a looser journal:mad:
     
    #803     Mar 31, 2006
  4. Prevail

    Prevail Guest

    it has been answered many times but no one has proven the idea of zero expectancy minus costs. it is a matter of opinion.

     
    #804     Apr 1, 2006
  5. sle

    sle

    Dude, what do you trade? Debits and credits are meaningless, what matters is decay P&L vs delta P&L. It does not matter if you get into a butterfly as 1x2x1 or as strangle-straddle, but it does matter that you are short gamma, long theta.

    Any view on undelrying, realized or implied vol can be expressed both in long and short gamma positions. If you are trading longer-dated stuff, you also have vega to worry about (if you are long 10y10y or 10y USDJPY Fx vol, you mainly care about demand from exotics desks, are you vega overpowers your gamma and decay).

    If you want to be long, you can buy a call spread (long gamma), 1x2 (usually short gamma), collar (gamma neutral) etc. I have some positions on where I'm both long gamma and theta at the same time. But you should always have considerations with respect to gamma vs decay, no matter what your volatility and underlying views are.
     
    #805     Apr 3, 2006
    .sigma likes this.
  6. Buy1Sell2

    Buy1Sell2

    Very true that decent directional analysis is helpful. However, net credit using time decay is always a higher probability of profit. This point cannot be argued against effectively.
     
    #806     Apr 3, 2006
  7. MAESTRO

    MAESTRO

    Could you please give me an example of a net credit option construct that always has long gamma?
     
    #807     Apr 3, 2006
  8. MAESTRO

    MAESTRO

    I'm sorry to say this, but it is sooo wrong! I don't want to repeat many of the posters on this thread; instead, you should read it right from the beginnig.
     
    #808     Apr 3, 2006
  9. short calendar spread
     
    #809     Apr 3, 2006
  10. Any/neutral conditions ? I trade short calendar spread , but only event (back month) driven. And like Maestro stated , I still have to be right on direction ( of vols , in my case).
     
    #810     Apr 3, 2006