Posted by frtaylor on 30th of Jan 2015 at 12:54 pm
I have some experience (not a lot) w/ options, long and short
options, spreads and a few IC's, calendars and butterflies. Which
trade were you thinking of for a straddle - SPX? I have a strangle
on for the SPX - out of the money long calls and puts for Feb 27.
Straddle as I understand it is harder because you buy ATM, so it's
really got to move to cover the cost.
You can look at a short strangle, which, if you're nimble in a
volatile market, you can both leg into and out of, with high
volatility giving you higher credits to collect. My experience is
that covering at 50% profits is the right combination of being able
to recycle capital without being too greedy. People tend to get
hurt in options most: a) when they only buy them; b) when they hold
out for too much.
A short strangle can work as well - putting it on a once &
covering each side when the market moves in both directions - but
that is a harder play in my experience.
Yes...the 2nd. The probability of profit is lower when you buy
either a straddle or a strangle (than in selling either of the same
strikes), but much, much lower when you buy a far out-of-the-money
strangle. The probabilities are knowable at any given time and are
highly valuable in trade selection.
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SPY, NFLX short starting to
Posted by frtaylor on 30th of Jan 2015 at 10:29 am
SPY, NFLX short starting to work. GDX long inv h/s on 5 min also working.
closed SPY short, reversed and
Posted by frtaylor on 30th of Jan 2015 at 11:59 am
closed SPY short, reversed and went long. Out of NFLX breakeven; GDXJ was a good trade - +1.8%
SPY
Posted by pjwhiteley on 30th of Jan 2015 at 12:40 pm
sometimes a straddle is a good way to go in a choppy market.
I have some experience (not
Posted by frtaylor on 30th of Jan 2015 at 12:54 pm
I have some experience (not a lot) w/ options, long and short options, spreads and a few IC's, calendars and butterflies. Which trade were you thinking of for a straddle - SPX? I have a strangle on for the SPX - out of the money long calls and puts for Feb 27. Straddle as I understand it is harder because you buy ATM, so it's really got to move to cover the cost.
You can look at a
Posted by a_l_ on 30th of Jan 2015 at 12:59 pm
You can look at a short strangle, which, if you're nimble in a volatile market, you can both leg into and out of, with high volatility giving you higher credits to collect. My experience is that covering at 50% profits is the right combination of being able to recycle capital without being too greedy. People tend to get hurt in options most: a) when they only buy them; b) when they hold out for too much.
A short strangle can work as well - putting it on a once & covering each side when the market moves in both directions - but that is a harder play in my experience.
thanks, a_i! I think you
Posted by frtaylor on 30th of Jan 2015 at 04:04 pm
thanks, a_i! I think you meant straddle for one of those two trades, yes?
Yes...the 2nd. The probability of
Posted by a_l_ on 31st of Jan 2015 at 08:39 pm
Yes...the 2nd. The probability of profit is lower when you buy either a straddle or a strangle (than in selling either of the same strikes), but much, much lower when you buy a far out-of-the-money strangle. The probabilities are knowable at any given time and are highly valuable in trade selection.