I disagree i960. Depending on which area of the strike space you are trading, if the surface is skewed/convex, you have a bunch of different...
If the options are priced fairly, your result is in-line with what you should expect from a delta neutral strategy -- breakeven. Try some other...
What are you trading? Can you be more specific?
Fair enough. I definitely agree on taking a view on vol / probability theory alone.
This is true in dollar premium terms, but that can be misleading. If the vol surface is convex (as it should be with stoch vol/discrete...
Yes, but I wouldn't call it that. And I'll emphasize, by no means am I saying a short straddle won't take losses if the underlying explodes...
Stochastic vol models have a correlation coefficient describing the relationship between the Brownian processes driving the vol/spot variables....
Yes....especially going into expiration when you are seeing delta bleed, it makes sense to be hedged forward in time to the next open versus...
Good question. And yes I believe this does depend on a lot of things, most importantly what is going on with implied vol. An increase in implied...
A faster, more heuristic method for this is to simply say: +/- 1 Sigma ~ Spot +/- ATM Straddle. Problems arise though... 1) Using this method is...
28% is absolutely a meaningful number. It is your breakeven vol. Assuming you are long the fly, if realized vol over the next year comes in...
Just out of curiosity...why are you even in the option trading threads?
So option trading is more risky than pretending you're a big boy and playing in a game where your competition are the likes of Virtu and Citadel?...
Wow....a sheep to the slaughter.
Please cite me one example of an "easier" way to make money? A trade you did this week perhaps...
There's a flip-side to every coin. You keep harping on the risks. Yes there are risks. But you appear to blind to the rewards.
Options offer opportunities that those other instruments do not.
The fact that you view a "great options trader" as someone who simply "retires" and takes it easy at home shows that you are way out of your element.
Ah yes....the old "Which insurance policy would you buy?" test at the airport.....if I remember correctly they found out that even professional...
He or she did not hedge correctly....
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