onyxperidot
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Jul 4, 2018
Joined:
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  1. DGH
Gender:
Male
Location:
Canada
Occupation:
Retired engineer

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onyxperidot

Well-Known Member, Male, from Canada

onyxperidot was last seen:
Jul 4, 2018
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  • About

    Gender:
    Male
    Location:
    Canada
    Occupation:
    Retired engineer
    My first options trade dated back to the 1970's. I got lucky and traded some mis-priced options and made a little bit of money. But my luck soon ran out. I couldn't find any profitable trades anymore as professionals began trading with computer models. The only trades I made since then were mostly convertible bonds, married puts, covered calls, and diagonal collars -- nothing to write home about. Even though I did not make much profits over the years, I have not lost any capital either.

    Since I retired in 2015, I have begun to trade options more actively. Aside from tinkering with broken wing put butterflies, I have messed around with statically hedged time spreads which are typically long theta, short Vega, delta and gamma neutral. The theoretical promise of statically hedged structures is that once a trade has been opened, it virtually can be held to expiration with very few or even no adjustments. The theoretical yield on margin is not very high though, average 2-3%/month maximum. The most significant risk of this kind of trade is implied volatility spikes. The idea of static hedging of options: https://drive.google.com/file/d/0B9fPLkdZBZT6Qk9zT2ZlSE9HdW8/view?usp=sharing

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    --
    There is nothing either good or bad, but thinking makes it so. -- William Shakespeare
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