Some Option traders here?

[alocacoc]

I just met a Russian Stocks and Future trader. It's the first time i met someone who are doing something similar like me. We had a very interesting conversation. Nevertheless, we both found our own way in trading. Who knows, may be someone here are trading option spreads, calendars, butterfly's, diagonals and so on at the US markets? Selling premium to collect theta? Doing earning trades with strangels or straddels?

Would be very interesting to speak with someone who are in the same kind of trading. Just for fun. If nobody here, sorry for my posting. Just close or delete it.

[novanova]

Well worth a read:

http://www.amazon.com/Options-Strategic-Investment-Lawrence-McMillan/dp/0735204659

[DogNo1]

Yeah. Huge and heavy book though. For the unsophisticated option trader, there is plenty of instruction on line, Just Google trading options. The complicated spreads require a good ability in math.

[manarak]

I was an officially licensed futures & options trader on the DTB (Deutsche Terminbörse), the German traded derivatives market.

But nowadays I trade derivatives only sporadically.

[PCA]

to be successful with options trading or options spreads still does require proper chart reading skills of the underlying and the consideration of volatility impact on the probable change in premium. Math is disturbing.

Straddles and Strangles on earnings plays are usually a no no unless you decide to drop a leg after things have cleared and you see a dominant directional move. 'Unless' in this regard means being lucky.

Options writing yes very good as a strategy and profitable in most cases.

Earnings plays go long put or call unprotected, lose 7 out of 10 and still make a lot. (know how to read chars make more than a lot)

Talking US stock options only while not sure what you mean with you're trading US markets.

[manarak]

the consideration of volatility impact on the probable change in premium. Math is disturbing.

LOL.

the first question I ask anyone claiming to be knowledgable in derivatives is to explain in just two sentences what the volatility smile is and what causes it.

[novanova]

The volatility smile is caused by BIG traders (hedge funds, pension funds, Vanguard, Fidelity etc) doing covered calls for income and selling puts for insurance.

[puukao]

I am like Goldman Sachs. I sell option contracts, customized off-the-floor variety. I try to sell 10 million worth and let time value take it to zero......it's impossible to sell it back to me above 40. i need 60% return...

easy money

[manarak]

The volatility smile is caused by BIG traders (hedge funds, pension funds, Vanguard, Fidelity etc) doing covered calls for income and selling puts for insurance.

nope

[gk10002000]

Active trading and actually making money and living off of it? Pretty rare. I don't mean working at a firm or a company as a trader where one gets paid. I sell some covered calls now and then as well as buy a few regular call options that I either sell or exercise. Minor basic stuff.

[bluebluewater]

I was once a registered rep about a hundred years ago but fully retired now. No pension and I'm too young anyway but I've been a lucky man along the way and I don't want for anything. I sell put options and do all right with them. I made a pot load of money with the oil and gas stuff in the first half of 2015 but gave some of it back in the 2nd half of the year. I thought that shit would find a bottom but it never and it cost me some money but I still ended the year very well.

It still has not found a bottom but when it does that is where I will I'm sure I will give it a go again. I'm thinking that might be at least mid year before that happens.

More recently I cannot seem to find anything that catches my eye and I've not sold any puts in a couple of months. I like to have a little something going as it keeps my brain from going to pot. I do NYSE only.

The way the markets are looking it might be best to stay out of ANYTHING for a couple of more months

Edited January 19, 2016 by bluebluewater

[alocacoc]

I made a pot load of money with the oil and gas stuff in the first half of 2015 but gave some of it back in the 2nd half of the year. I thought that shit would find a bottom but it never and it cost me some money but I still ended the year very well.

Sounds similar to my experience last year. Which broker do you use? Mainly i trade SPX/SPY. But very rare i sell naked puts. I prefer to sell spreads.

@manarak, it shows the distribution of implied volatility of in, at and out of the money options.

Edited January 19, 2016 by alocacoc

[manarak]

@manarak, it shows the distribution of implied volatility of in, at and out of the money options.

ok, you get 50% of the question's points for that answer, can you also tell what is causing the distribution to look like a smile?

[PCA]

 

@manarak, it shows the distribution of implied volatility of in, at and out of the money options.

ok, you get 50% of the question's points for that answer, can you also tell what is causing the distribution to look like a smile?

 

hard to believe that you were a trader, might be true that you were working at the DTB though. Serving drinks and cookies or such is my guess.

The first question I always ask when meeting an ex-trader is why did you stop but I actually shouldn't.

[manarak]

 

@manarak, it shows the distribution of implied volatility of in, at and out of the money options.

ok, you get 50% of the question's points for that answer, can you also tell what is causing the distribution to look like a smile?

 

hard to believe that you were a trader, might be true that you were working at the DTB though. Serving drinks and cookies or such is my guess.

The first question I always ask when meeting an ex-trader is why did you stop but I actually shouldn't.

... says the "math is disturbing" guy, LOL.

[PCA]

 

 

@manarak, it shows the distribution of implied volatility of in, at and out of the money options.

ok, you get 50% of the question's points for that answer, can you also tell what is causing the distribution to look like a smile?

 

hard to believe that you were a trader, might be true that you were working at the DTB though. Serving drinks and cookies or such is my guess.

The first question I always ask when meeting an ex-trader is why did you stop but I actually shouldn't.

... says the "math is disturbing" guy, LOL.

 

I like the one with almonds, thank you.

[manarak]

 

hard to believe that you were a trader, might be true that you were working at the DTB though. Serving drinks and cookies or such is my guess.

The first question I always ask when meeting an ex-trader is why did you stop but I actually shouldn't.

... says the "math is disturbing" guy, LOL.

 

I like the one with almonds, thank you.

that you believe there were any traders actually working "at the DTB" actually shows your ignorance.

trading at the DTB has always been fully computerized and decentral.

you are a plonker.

[PCA]

 

 

hard to believe that you were a trader, might be true that you were working at the DTB though. Serving drinks and cookies or such is my guess.

The first question I always ask when meeting an ex-trader is why did you stop but I actually shouldn't.

... says the "math is disturbing" guy, LOL.

 

I like the one with almonds, thank you.

that you believe there were any traders actually working "at the DTB" actually shows your ignorance.

trading at the DTB has always been fully computerized and decentral.

you are a plonker.

 

still love those cookies and trying to analyze the volatility smile and plonkerism.

[RandomSand]

Classic narcissistic argument in progress!

perhaps you guys might like this:

[alocacoc]

Straddles and Strangles on earnings plays are usually a no no unless you decide to drop a leg after things have cleared and you see a dominant directional move. 'Unless' in this regard means being lucky.

What i like to do, on particular underlyings, (BBBY is a good example), buy a straddle or strangle about 2-3 weeks before earnings report when the volatility is quite low. Then i sell it before the earnings. Often enough the rise in volatility brings enough profit, even without a bigger move in the underlying. This works very well. Now, since the volatility in principle is elevated, its not the best environment for that kind of earning games.