tag:blogger.com,1999:blog-4049167043965640947.post440037009410586686..comments2022-06-05T13:28:32.605-07:00Comments on Option Trading: 01/21 MNX Iron ButterflyGustavo's Tradeshttp://www.blogger.com/profile/10318651374855413975noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4049167043965640947.post-4117840938359368922010-01-23T01:29:20.005-08:002010-01-23T01:29:20.005-08:00Great!!
Thanks Gustavo - Gamma protection is somet...Great!!<br />Thanks Gustavo - Gamma protection is something I have always ignored - Mark Wolfinger talks lots about Gamma but I always seem not to take this Greek into consideration enough! The learning process continues!<br />Any chance you could elaborate on the "2.0 version of Dan Harvey's strategy" you hinted on in your NDX trade?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4049167043965640947.post-61064510849745184042010-01-22T21:07:09.055-08:002010-01-22T21:07:09.055-08:00Hi there, I usually start by buying a long Put or ...Hi there, I usually start by buying a long Put or Call in the back month. In this case, I'm trading the FEB Iron Butterfly, so I'll buy MAR contracts, single PUTs or Calls.<br /><br />They are more expensive than a vertical debit spread, and even more expensive than a long in the same month. However, they are "lighter" in terms of negative theta (compared to the FEB longs) and deliver a much better punch in terms of gamma protection (compared to the debit spread).<br /><br />This month, as my short contracts are getting into the high delta zone. AKA Delta Hogs, I'm starting to roll them out, that is another way to control the delta.<br /><br />Hope that helps, I have been thinking about writing an e-book on this trade, as it is the best strategy I traded thus far.<br /><br />GustavoGustavo's Tradeshttps://www.blogger.com/profile/10318651374855413975noreply@blogger.comtag:blogger.com,1999:blog-4049167043965640947.post-78967854502189918802010-01-22T01:34:06.794-08:002010-01-22T01:34:06.794-08:00Hi Gustavo,
When cutting Deltas, what is your cri...Hi Gustavo,<br /><br />When cutting Deltas, what is your criteria for either buying a Vertical in the same expiration month or buying a single Put or Call in the next month out? Is this to do with if the underlying is either trending or whipping?Anonymousnoreply@blogger.com