these options-ception plays are great. Definitely expanding my knowledge with these. Before the last ception video I never thought this was a possibility. Thanks!
Good lesson, Seth. There is an error on the slide at 11 minutes into video, SPX was at 3891 as you verbally indicated but the slide shows that SPX at 2891.
How about losing the volatility value? When SPX goes up, the volatility value drops greatly, and the bought farther option loses significant value, and that leads to loss.
100%, when market dropped, VOL spiked, so 2nd calendar on the down side was overpaid for, market goes back up vol drops which creates a significant sag in the middle. And who keeps them until last day of expiration? Seriously? Can't trust anyone ...
The thing I am having a problem reconciling is the short 3875 calls that are ITM by 16 pts are now worth less than when they were bought? You can now buy them back cheaper? Yes there is theta but they are still ITM and unless I am missing something here no MM is going to let these ITM short calls be bought back for le than what they were paid for.
You asked and answered your own question. They are worth less than what they were bought for absolutely because of theta decay. Market makers don't (always) care about individual positions. They manage their positions holistically (at the portfolio level) concentrating more on the portfolio greeks. The actual value of the option is worth more than the 16 pts in the money so there's intrinsic value + the last bit of remaining extrinsic value prior to expiration.
we have traders using scripts and working on automated strategies. It takes constant backtesting and updating however so it's always a work in progress
TO BE HONEST, if i have learned forex when i was 10 years old my story would have been different, i mean forex is really easy i have traded it for years and i'm a profitable trader
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You guys are the best! No get rich quick schemes, no ATM promises, no guarantees, just cold hard information and advice.
thanks :) we try to keep it real here
these options-ception plays are great. Definitely expanding my knowledge with these. Before the last ception video I never thought this was a possibility. Thanks!
very welcome Dennis!
Excellent video Seth! Thank you.
thx Steve!
How do you deal with horizontal volatility skews?
Good lesson, Seth. There is an error on the slide at 11 minutes into video, SPX was at 3891 as you verbally indicated but the slide shows that SPX at 2891.
you are probably right on that - we mess up sometimes
Love the idea of calendars, but very hard to master. Work in progress. Keep at it and stay hungry. There’s really no alternative.
Thank you for this analysis of a short term calendar and and your market adjustment.
you got it!
Thank you, best, concise explanation, as opposed to all the Clown explanations available.
How about losing the volatility value? When SPX goes up, the volatility value drops greatly, and the bought farther option loses significant value, and that leads to loss.
100%, when market dropped, VOL spiked, so 2nd calendar on the down side was overpaid for, market goes back up vol drops which creates a significant sag in the middle. And who keeps them until last day of expiration? Seriously? Can't trust anyone ...
The thing I am having a problem reconciling is the short 3875 calls that are ITM by 16 pts are now worth less than when they were bought? You can now buy them back cheaper? Yes there is theta but they are still ITM and unless I am missing something here no MM is going to let these ITM short calls be bought back for le than what they were paid for.
You asked and answered your own question. They are worth less than what they were bought for absolutely because of theta decay. Market makers don't (always) care about individual positions. They manage their positions holistically (at the portfolio level) concentrating more on the portfolio greeks. The actual value of the option is worth more than the 16 pts in the money so there's intrinsic value + the last bit of remaining extrinsic value prior to expiration.
Nice and simple explanation... Can we construct calendars using puts ? How are they different from call calendars ??
yes you can. Difference is that you are expecting the underlying to drop in value. Upside down mirror image! 🙂
How does this compare with a diagnol simultaneously constructed on call and put side ?
You explained it very clearly. Thanks!
Thank you
I'm curious, why do u have live traders? Can't u just tell a computer an algorithm to do?
we have traders using scripts and working on automated strategies. It takes constant backtesting and updating however so it's always a work in progress
Traders pay monthly fees, regardless if they make money or lose.
All these trading experts in the comments
:)
So we paid 23k to get in the trade and got 8k to get out? So we lost 15k? Am I missing anything here?
He paid 23k and effectively sold everything for 31k! So he made 8k!
Be careful from IV guys
TO BE HONEST, if i have learned forex when i was 10 years old my story would have been different, i mean
forex is really easy i have traded it for years and i'm a profitable trader
That is a bold statement as BS. Forex, chef, plumber, bla bla bla, etc is not easy till you learned the skill and get good at it.
Lmaoo
🤣 This is freaking hilarious. TO BE HONEST, if I have learnt options when I was 5 years old my story would have been different 🤔🤣🤣