I liked the rolling thunder presentation by Scott I am just not sure I understand or agree with the philosophy of the strategy at least not in the current market
What I mean is that he started out with the idea of buying a put spread to hedge off a long position or long deltas which was fine but than he switched to trying to eliminate the risk on the upside
It seems like he was trying to burn the candle at both ends or as he was saying you have to be bipolar
You can't have it both ways
So as SPX went down he sold put spreads to eliminate the risk on the upside which was fine but that reduced the hedge that he was trying to protect his long deltas and only has a small range where he is protected which in this market that can easily go out of the range in one day unless yo watch the market all day
Of course the students not knowing any better because maybe they don't see the big picture they voted to eliminate all the risk on the upside which looks fine if you only have that trade on without the long position
But what happened to the original long position ?
Now it is almost in the same position as the original trade except you gained $800 plus a chance to get more if it gets back and stays in the narrow condor tent
Now you have to start all over by trying to hedge of the long position almost like a vicious circle
It seems to me like if the idea was to hedge off the long position it would have been enough to have just the debit spread than you only have to worry about the sea of death which in this market it's not likely that SPX will stay in this place for too long and he briefly mentioned that if SPX goes up it will eliminate the loss on the debit spread
It might be interesting to try it as a stand alone strategy without the long position in which case you do have to worry about the upside
Also I probably would not be able to do it at my other brokerages outside of TOS because they don't offset the debit with the credit so it would require a high margin
What I mean is that he started out with the idea of buying a put spread to hedge off a long position or long deltas which was fine but than he switched to trying to eliminate the risk on the upside
It seems like he was trying to burn the candle at both ends or as he was saying you have to be bipolar
You can't have it both ways
So as SPX went down he sold put spreads to eliminate the risk on the upside which was fine but that reduced the hedge that he was trying to protect his long deltas and only has a small range where he is protected which in this market that can easily go out of the range in one day unless yo watch the market all day
Of course the students not knowing any better because maybe they don't see the big picture they voted to eliminate all the risk on the upside which looks fine if you only have that trade on without the long position
But what happened to the original long position ?
Now it is almost in the same position as the original trade except you gained $800 plus a chance to get more if it gets back and stays in the narrow condor tent
Now you have to start all over by trying to hedge of the long position almost like a vicious circle
It seems to me like if the idea was to hedge off the long position it would have been enough to have just the debit spread than you only have to worry about the sea of death which in this market it's not likely that SPX will stay in this place for too long and he briefly mentioned that if SPX goes up it will eliminate the loss on the debit spread
It might be interesting to try it as a stand alone strategy without the long position in which case you do have to worry about the upside
Also I probably would not be able to do it at my other brokerages outside of TOS because they don't offset the debit with the credit so it would require a high margin