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  3. Reverse Iron Condor Strategy

    Higher win ratio, but smaller gains because RIC with long options ATM would be more expensive.
  4. Reverse Iron Condor Strategy

    Rookie here: Would a RIC win ration be greater, providing stock was expecting a big move, if the long put and call were both at the money?
  5. Selling to Close Options Position (Not ITM)

    Yes, that is exactly what you could (and should) do. The strike price is almost irrelevant. You can sell any option you own at any time until the expiry date.
  6. Selling to Close Options Position (Not ITM)

    Thank you all for you above input, it is greatly appreciated! A little different that asking questions in StockTwits LOL. Am able to close/sell the contracts (NOT convert to stock) at the high price contract price - if the stock were to go in my favor? If I bought the MU calls @ $2.00 with a strike of $65, and the stock goes up to say $63 and now the call contracts are worth $3.00 ... could I close my position, without buying the stock, and pocket that $1 per contract difference? even though it wasnt at my strike price. I think I have a few more books to read before diving in Thanks again all!
  7. The Incredible Option Trade in VXX

    Is long VXx put spread still a good strategy under today's market condition?
  8. The Incredible Winning Trade in SVXY

    I understand. I praise you for your patience.
  9. The Incredible Winning Trade in SVXY

    I have an obligation as a Mentor to respond to a member’s questions and misinformation, believe me I’m no more interested in this impossible discourse than you are.
  10. The Incredible Winning Trade in SVXY

    Are you seriously still talking about this? My email box has been flooded for the past 24 hours with posts about this topic. I amazed that this is still being discussed. In my opinion, this was put to rest 27 posts ago. Why are you still talking about about it? I'm shutting down any further alerts from this topic, as it is flooding my email box, and I would think that the majority of you would agree, that it has passed any degree of usefulness 12 hours ago.
  11. The Incredible Winning Trade in SVXY

    At this time I am going to ask you to refrain from giving me any further lectures on option theory. I am not referring to put/call parity but rather to buying further dated options when IV is low and buying closer dated options when IV is high, this leads to staggering between the short and long at times and acts as additional protection in IV spikes when the underlying moves against the position and protects against IV crush if initiated during a spike in IV. It also allows me to sell multiple iterations of the short against the same long. Selling each week generates a greater credit than selling multiple weeks out and allows for more flexibility on strike selection. This all has proven to be very beneficial over the course of the last two months on the model portfolio trade. All that being said, based upon this discourse it seems it is probably best that you pursue your own strategy. Best of luck.
  12. The Incredible Winning Trade in SVXY

    IV is the same on the same strikes for puts and calls, you don't have any benefits from puts vs calls (or vice verse) even when volatility spikes. Even the margin requirements are/should be the same either (at least if your broker has proper soft). Kim, are you agree? You can play with P&L graphs over the time (using any stocks or ETF or commodities). Time to expiration doesn't matter here. When you have different IV for calls and puts you can do arbitrage (buy shares - call_strike1 + put_strike_1 = some risk-free credits at expiration).
  13. The Incredible Winning Trade in SVXY

    Yes, the difference is I often stagger the long put and short call with regard to expiration based upon IV. With lower IV of the underlying I will hold the long put out 3 weeks as it is less expensive to purchase and will benefit more with a spike in IV while I will keep the short call out 1-2 weeks in that environment.
  14. The Incredible Winning Trade in SVXY

    Aha, got it. Let consider your position +Call70 + Put103 - Call110 vs +Put70 + Put103 - Put110. Do you see any difference? We can even simplify it to +Call70 - Call110 vs +Put70 - Put110.
  15. The Incredible Winning Trade in SVXY

    I never said buying an ITM call was better than OTM put plus the underlying. Your question was regarding an OTM credit spread plus a put with no shares. Your example was -110 put + 103 put +70 put. That is the example I was referring to, nothing that included shares/ITM options.
  16. The Incredible Winning Trade in SVXY

    Hi Kim, Yes, the idea of replacing shares with ITM option is pretty clear - you are buying the additional hedge which helps to mitigate/reduce the risk. In my opinion, it's not required, but if you want to have smooth profit curve - it might be OK. SBatch mentioned that cost is low enough and I'd agree here - it's your strategy. Let close this part. My question was different - SBatch mentioned that buying ITM call is better than OTM put + underlying (practically, you can build the inverse one: shares - OTM call (covered call) vs naked put). "Yes the extrinsic is the same on both but you are missing the bigger picture which is how it impacts the trade." Or "The extrinsic value may be the same but the trade implications are totally different". For me, there is no difference at all what position to open (no touch commisions or margin): ITM call or shares + OTM put (same strike) OR shares - OTM call vs -ITM put. If you or SBatch can give real examples when it matters - it would be great. A couple of times I saw the situations with NUGT and DUST when IV calls was not equal to IV of puts on the same strikes - but it might be terminal issues. If you agree with my statement about ITM/OTM - wonderful, all questions have been answered. From commision/margin/management point of view, you can use ITM or OTM according to the situation (spread, etc.)
  17. The Hidden Dangers of Iron Condors

    I agree with Kim, the article was simply meant to demonstrate the two different trading styles. Shorter-term is high risk / high return while longer term is lower risk / lower return. Each trader needs to decide what is right for them.
  18. The Incredible Winning Trade in SVXY

    The whole point of replacing the shares with deep ITM call is to profit from sharp pullback. If SVXY continues higher, the shares will behave almost like 95% delta call. But when SVXY goes down, the delta of the long calls decreases, so the loss of the calls becomes much smaller than the loss on the shares. At some point if long calls become OTM, the long puts increase in value much more than the long calls lose - this is what allowed this specific trade to make such nice gain after SVXY collapse. It would never be possible with "standard" collar.
  19. The Incredible Winning Trade in SVXY

    OK, a couple of clarifying questions. Let simplify our SVXY position to the ITM Call 70 vs. SVXY + OTM Put 70. Did I get you right that you see a difference between them from P&L perspective (they have same extrinsic value and let forget about margin for a while)? If yes, might it be described as a different IV for the call and put on the same strike? And the second question - do you see the difference between your full SVXY position: +Call70 + Put103 - Call110 and my proposal: +Put70 + Put103 - Put110?
  20. The Incredible Winning Trade in SVXY

    Yes the extrinsic is the same on both but you are missing the bigger picture which is how it impacts the trade. This is what I was referring to by saying they were totally different. I am speaking in terms of reality not academia as reality is what matters. If the underlying moves against the trade the losses are diminished as the Delta declines while the shares take the full loss. At this time the trade can be adjusted back to a 95+ Delta option to recapture 95%+ of the gains on the mean reversion which would increase returns. These types of adjustments are made frequently. In addition the margin requirement is lower using ITM options. Therefore at a cost of less than 1% per year the trade has the ability to profit in a huge vol spike, loses less in a moderate to high vol spike, is more flexible for adjustments which enhance returns and requires less margin (which could be deployed elsewhere to more than make up the 1% annual hedge cost). This is what I meant by saying they were totally different. The extrinsic value may be the same but the trade implications are totally different.
  21. The Incredible Winning Trade in SVXY

    Yes, thanks for your answer, I'm not trying to study you and I said at the beginning that original scheme makes sense to me. I don't see the value to add one more option (replacing shares with ITM). For me it reduces the profit in the long term, but yes - helps to fight when market crashes. It's your choice - no doubts And one more thing: "No it's not, not even close. At .95+ Delta we pay essentially no extrinsic value, whereas OTM options are all extrinsic." The reality is that extrinsic value is the same for ITM and OTM. That's all. And please excuse if my posts looks aggressive or mentoring - they are really not. SteadyOptions is one of the best materials about options which I ever seen.
  22. The Incredible Winning Trade in SVXY

    Yes I am well aware of everything you posted here, what’s your point? I answered your original question about how the modified Collar is different than the bull put spread. You then told me I need to do more backtesting because of how the Theta and IV were going to hurt the trade. I illustrated to you how that is completely false. Now you are giving me a lesson on how a deep ITM call equals a far OTM put (which I am already aware of and it has no real world bearing or practical implications on this trade’s performance).
  23. Using OTM Directional Calendar Spreads

    Agree, but IV may continue declining even if its low enough (look at SP index or Gold last years) what completely beats decay...And no approach how to manage the position to remove/mitigate the risk
  24. The Incredible Winning Trade in SVXY

    As already mentioned "A deep in the money call = a far out of the money put", otherwise it can be an option for arbitrage. VXX 105 call has the same intrinsic value and 105 put - yes, its pretty small, but not 0. No difference what you are buying: underlying + OTM put or deep-in the money call. The extrinsic value decays in both cases - OTM put or ITM call and since its far from central strike the speed of decay became slow reaching expiration (so almost no impact that you are closing the position one month before expiration)
  25. Using OTM Directional Calendar Spreads

    It is true - this is why Drew mentioned that one of the considerations is "When volatility is relatively low". But this is mostly theta trade, not vega trade. Vega will hurt only if IV goes down really dramatically, otherwise theta should still overcome it if the underlying doesn't move much.
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