tag:blogger.com,1999:blog-4049167043965640947.post1261970178163643335..comments2022-06-05T13:28:32.605-07:00Comments on Option Trading: 08/12 MNX Iron ButterflyGustavo's Tradeshttp://www.blogger.com/profile/10318651374855413975noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4049167043965640947.post-48751662632094887612009-08-14T13:14:24.606-07:002009-08-14T13:14:24.606-07:00Gustavo,
One more question (for now).
Noticed yo...Gustavo,<br /><br />One more question (for now).<br /><br />Noticed you included a Long AUG 160 Call iniitially. Don't see a comment about it. Was that to hedge off some delta?Genehttps://www.blogger.com/profile/00651183747831660515noreply@blogger.comtag:blogger.com,1999:blog-4049167043965640947.post-76129563524224482202009-08-14T11:56:03.669-07:002009-08-14T11:56:03.669-07:00Thanks Gustavo.
Really helps.Thanks Gustavo.<br /><br />Really helps.Genehttps://www.blogger.com/profile/00651183747831660515noreply@blogger.comtag:blogger.com,1999:blog-4049167043965640947.post-45364835984042733332009-08-14T07:39:28.394-07:002009-08-14T07:39:28.394-07:00Hi Gene, it depends on how the trader preffers to ...Hi Gene, it depends on how the trader preffers to calculate ROI. I use the original position size. If I make adjustment that add size (in $ or margin), I keep the same P&L goal or stop loss.<br /><br />By doing it this way, I can keep a consistent capital allocation and yearly Return. It is important to know however, that you need to have a reserve in margin in order to make all the adjustments.<br /><br />I keep at least 3 times my allocation, if you have a portfolio margin account, this becomes a lot easier to do. So, the KEY here (and in any trade for this matter) is to keep your positions small enough that you can handle adjusting/increasing it in size..<br /><br />There are other non-directional option strategies that you can adjust without increasing your margin too much, but that's not the case for the Iron Butterfly. <br /><br />As far as the spreadsheets, I posted a couple of entries on those. Here are the links:<br /><br />http://gustavotrades.blogspot.com/2009/08/understanding-volatility-cone.html<br /><br />http://gustavotrades.blogspot.com/2009/08/trade-monitor-day-by-day.html<br /><br />I need to do some housekeeping and add those to the menu. Hope to have some time this weekend.<br /><br />Cheers!<br />GustavoGustavo's Tradeshttps://www.blogger.com/profile/10318651374855413975noreply@blogger.comtag:blogger.com,1999:blog-4049167043965640947.post-91910510005718511202009-08-14T04:55:10.053-07:002009-08-14T04:55:10.053-07:00Hi Gustavo,
On a trade like this where there are ...Hi Gustavo,<br /><br />On a trade like this where there are so many adjustments and changes to "buying power"/margin. What is your ROI calculated from?<br /><br />Also, where can I find that volatility cone / ROI / Std Dev software you're using for your pictures?<br /><br />ThanksGenehttps://www.blogger.com/profile/00651183747831660515noreply@blogger.com