Discussion in 'General Discussion' started by Jerryb351, Feb 11, 2018.

  1. Jerryb351

    Jerryb351 Active Member

    First of all, I want to thank you guys for letting me join this community! I was a former SOM student and part of the California Trading group on Thursday evenings.
    Ive been trading actively for about 5 years(profitably), and wanted to share or ask the community some topics just for the sake of conversation :

    1) As income traders , Ive found (like most) trades that have a flat T+0 line (RTT, etc.)are the easiest to manage. However, we always seem to be fighting Vega in these trades. Their has got to be a way to trade these flat t +0 line type trades and BENEFIT from a low to high Vol environment . The week before last weeks drop , I noticed my t+0 line "sinking" as vol skew changed. I get it. Imagine though, for a second that we could have this flat profit line and benefit from Vol. increase and the market drops . I would love that , but I guess we cant have our cake and eat it too. :)

    2) Does anyone else feel like their will be a day when we cannot trade against algo traders ? I know we were over extended yugely, but largest Dow point drop in history just happened last week. I dont know about you guys , but that scares the heck out of me. As traders, we are putting our money into a more and more irrational environment . Why do I personally do it? 1) I love it 2) Its a business, and I dont have to pay employees 3) Its not physically demanding ( like my regular job)

    Again, thank you for allowing me to join the community !

  2. ACS

    ACS Well-Known Member

    We just saw a extended period of extreme low volatility, possibly exaggerated by all the negative volatility derivative selling and a run away upside market. This was a very difficult environment for classic income trades unless they were timed carefully or over hedged to the upside. That clearly ended last week and in retrospect ended earlier when IV started to climb even as the markets continued to run up. Based on what has happened, I suspect it will be a LONG time before volatility returns to single digits and once market movement quiets down a little, conditions will be fantastic again for income trades. Think 2010-2012 again.

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