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Please use the Thanks button in the lower right of a post to thank a person. Making a new post to thank someone just makes this thread longer than it needs to be. Then people don't want to read all of the thread because it is so long.
So to be clear the newest strategy is selling 2 puts @ 3delta and buying 3 puts @ 1.5delta with 90-108 days left?
In the reading the thread, I am just up to 585. When did the adjustment occur; what was the catalyst?
Also, I've read where some sell on the call side. Are there specific guidelines to implement along side the put strategy?
Ron, earlier in the thread you reference knowing not to have been in the market during the later Aug'15 time frame.
What would have been the clues or analysis you would have used to ascertain the market condition and stayed out?
Ron, earlier in the thread you reference knowing not to have been in the market during the later Aug'15 time frame.
What would have been the clues or analysis you would have used to ascertain the market condition and stayed out?
Thanks, Ky
Can you point me to the post where I said that. I don't remember.
If you right click on Permalink in upper right of the post you can copy the link. Then paste it in the response using the Insert Link in toolbar right below smiley face.
I do remember saying I wouldn't have been selling ES puts late in 2008. The market conditions that year were very volatile and there were banks closing earlier that year. Not to mention the housing collapse.
I have been charting data like employment, retail prices, housing to see indications of when economy is turning worse.
Hi Ron, based on the current strategy of -2 3D & +3 1D puts, we'd be looking at -2 ESU8 2100P (@7) and +3 ESU8 1980P (@4.5). The contract is 121 DTE and this gives a premium of only ~0.6 or ~$32 before transaction per "lot". Am I missing something here, since I remember there was a discussion on this and/or the diversified selling thread regarding not getting involved with short options with low premiums below $200-$300/contract.
I see that IV has dropped off quite a bit recently so not sure if that's causing the super low premiums here with the strategy. Would appreciate your thoughts!
Hi Ron, based on the current strategy of -2 3D & +3 1D puts, we'd be looking at -2 ESU8 2100P (@7) and +3 ESU8 1980P (@4.5). The contract is 121 DTE and this gives a premium of only ~0.6 or ~$32 before transaction per "lot". Am I missing something here, since I remember there was a discussion on this and/or the diversified selling thread regarding not getting involved with short options with low premiums below $200-$300/contract.
I see that IV has dropped off quite a bit recently so not sure if that's causing the super low premiums here with the strategy. Would appreciate your thoughts!
You have the wrong strike. The shorts should be -3 delta and the longs -1 delta. Your 1980 strike is about -2 delta.
So the trade today would be ESu8p2070(-2)p1770(+3). Net premium from yesterday's settlements is 4.75. IM is 684. If you exit at 50% drop in 30 days the ROI is 2.2%.