Micahjw

Hey all, The option trading firm I work for has an opening in our investment management/research department for someone looking to get into trading, asset management, option research and testing, and the opportunity to be a part of a fast growing firm. We are looking for someone with options experience, but it doesn't have to be a whole lot or necessarily in a job setting; we prefer those who are self-taught and who have the type of mindset and approach that is so frequently displayed here in the SO community. The job would be supporting our portfolio managers and traders and would require relocation. If interested, feel free to PM me for more info.

This has been the most confusing part of it for me too - I've also accidentally sold something at a very bad price because I didn't have the negative/positive set right with the spread. Very un-user friendly. I've been with and used over 5 online brokerages and this is definitely the most confusing when it comes to spreads. Love their prices though, so very willing to put up with stupid layout and lack of user-friendliness.

But the vertical spread seems to only be for debit spreads, they don't seem to have anything for credit spreads. I guess you just use the pair or leg by leg section for that? Also, on the option trader (which thanks for mentioning, I hadn't used this before), how do you get things populated on that? There's nothing in the option chains, trading or quote panel sections.

What you are saying on calendars sure seems to make sense - the BWB seems to put more things in favor, less can go wrong, etc. On the comment of Syria, a spike isn't a bad thing with the BWB the way he set it up, what you don't want is a crash down, likely only possible by either some kind of "break" in the product (ala, TVIX) or a very fast move upward in the market which would hopefully give you at least some time to adjust. Or if long the market, perhaps offset some what. I think Mikael said it earlier, or someone, why not have the BWB on all the time with VXX, or one month out or so, every month. If the upside is a slight credit or breakeven you don't care about a spike in the short-term (most of the time it will just come back down in your range), if it starts to go down too fast, you can adjust downward most likely, and if it does its normal thing, you should be able to see a profit. It would also probably be better to set it just below current prices to play to the downside since that is the path of least resistance for the product. Thoughts?

Nice work - I was actually thinking of this site; http://www.tradingvolatility.net/

So I was looking at them the other way - with the VXX having to spike to lose money, but I guess I see why you would reverse it with the protection to the up side in case of spikes. Are you assuming there is less chance of the market moving up quickly and VXX going down a lot?

Having to refresh up on BWB's, so thanks for that. :-) This site had some interesting videos on BWBs and adjustments, etc. http://www.probabilityofsuccesstrading.com/?page_id=841

Great info guys, thanks

Paul, help me understand your thought process on this one. I haven't been much of a double calendar trader so I'm trying to learn more about them especially after the higher success rate of them over this summer here at SO; what do you look for when you think a set up looks attractive? Low hist IV? wide range on the BE?

I've been trying to learn from a distance on these types of trades (SPY and GLD etc) and I think I'm getting the gist of them, but what types of stocks or setups should one look for with this type of strategy? Are there other possibilities that work well besides SPY and GLD? Can one take the concept to the long side in the same way for a long bias (like one might prefer to do with GLD right now?)? If one has been tracking this or the SPY trade, is there a particular entry point that is better/worse or is it possible to just open a similar Dec/Jan long SPY put and start writing the short weekly puts?

Great source for learning about charts... http://www.thepatternsite.com/visualcpindex.html Also his stuff on trading is excellent

Interesting discussion - let us know the results of your paper trading on the double diags.

Chris, Any way we can get an update on all the transactions so far, for those of us still trying to grasp the concept of the trade? It would help to visually see each cost/position and adjustment line item, etc to see what has happened and how you will continue to build on the trade. If that's too much trouble, no worries.

Still trying to understand the in and outs of this type of trade. It makes sense, but I'm wondering what you do to adjust if the market goes down hard between now and July 19 and your July 19 163 that you are short is a major loss to roll. If this occurs, do you just close out the whole position and start over? Take the loss?

I don't think I'm fully understanding - can you explain further this: "With only selling off 75% each week, that really means the "cost" to pay off is 11.37. With 26 weeks left, we need $0.43 extrinsic each week to break even." I understand the basic of buying the far out puts and then selling nearer puts against that position...

Maxtodorov, Do you have to pay the exchange fees? Can you get data from some other source and not pay the large monthly costs for the exchange data? When I looked into IB they quoted rates on various exchanges from 30 to 127 a month and that would kill any cheaper rates for me. Also, they seemed to charge for canceling/modifying orders. Which, I don't know about others, but a lot of times I put in a limit and then cancel and and slowly move up a few pennies until I get filled. Don't really care to get charged on cancelling, but I guess if its small it doesn't matter that much.