Two-Step Strangles

Don’t buy both legs of the strangle at the same time. Whichever side is getting the most stress and therefore volatility, buy that side first. Then wait for mean reversion, and when mean reversion takes place sufficiently, then buy the other side, as its volatility will then be increasing — but wait for a sufficient increase.

Traders who buy both sides of the strangle at the same time are not taking maximum advantage of volatility. If the target asset is going down hard, then the bullish side will have low volatility, so buying the bullish side simultaneously is not optimal. If the target asset is rising sharply, then the bearish side will have low volatility, so buying the bearish side simultaneously is not optimal. If the target asset is not moving much in either direction, neither side will have optimal volatility. So it is NEVER advantageous to buy both sides of the strangle at the same time.

Whichever side you buy first, leg into it instead of buying all the contracts for that side at the same time. If your contract size is, for instance, 2 contracts for each leg, then buy 1 contract first and if the target asset continues in the same direction, buy the second contract at a better strike price than the first. Do the same thing for the other leg. Don’t kid yourself that you “know” how severe a move the target asset will make in either direction. You don’t, no one does.

Naked Calls

Climate Change Disagreements

I think the real debate about climate change isn’t whether it is happening and the degree to which humans are causing it — most reasonable people agree about both — but rather what measures should be implemented to address it. There is intense disagreement about these measures.

The most divisive issue has to do with restricting our use of fossil fuels. Radicals would have us do this to a large degree, but conservatives protest this would undermine our economies and lead to hardship and poverty.

Thoughtful conservatives now have the counter argument that the real remedy here has to do with more efficient ways to extract carbon from the atmosphere — through improved soil management on a large scale, planting trees and reforestation, new carbon extraction technologies, etc., i.e., use of fossil fuels becomes a non-issue if you can extract enough carbon from the atmosphere to achieve net equilibrium.

“Our Planet”

Serenity

Don’t underappreciate calm serenity.

Marcus Aurelius noted that one can retreat into the serene haven of one’s own mind at any time.

We live in an age that dotes on excitement and entertainment, but this perspective may be harmful if taken to the extreme, and may lead one to not appreciate the very real benefits of serenity.

Those who practice some form of meditation have come around to this point of view.

In the long run, which is really more beneficial to you, excitement or peace of mind?

Xperience

Silence

Never proud in death’s sad embrace,
And when the winds blow and the harsh rains descend,
The soul doth but meekly ascend.

Here but a few moments in fleeting time,
When it is time to go, we do not mend,
As the hourglass comes to its crushing end.

Nothing to say about such a journey…
No soothing comment for who must follow.
Silence — the only reply from the cavernous hollow.

Lunatics in Charge

Biden has Kerry and Rice back in his White House. These were the two knuckleheaded masterminds of the “Peace in Our Time” deal with Iran. They took a page from Reagan but altered it a bit — “Trust but no verify,” as they were in such a hurry to get a deal — any deal — with Iran. Just like Chamberlain at Munich. So we are going to have lunatics in charge of our foreign policy again, if you can call it that.

And of course Biden is in bed with the Chinese, perhaps even financially benefiting from Chinese companies. But then you know that for career politicians, graft is just considered their retirement benefit. So back to the “policy” of doing things that benefit China but undermine the US — because the Rust Belt isn’t big enough yet.

First Real Test for Biden

Munich Agreement

Weight Control

Not weight loss but weight control — what can you do to stabilize your weight, not to lose weight per se, but instead to help ensure that it doesn’t creep back up?

One thing that I do is once a week, on a designated day that I know I’m obligated to use for that purpose, I have a low-calorie day. I shoot for 550+ calories lower than what I usually eat (Cronometer helps a lot with this). Tuesday is my low-calorie day, and I usually eat the same assortment of foods, which tend to be very low in fat calories. But there are little nuances on that particular day that help me get to minus 550 calories. For instance, instead of my usual 3 prunes I only have 2, instead of 2 figs, just the 1. Instead of my usual mouthful of walnuts, I’ll skip nuts entirely, and have an extra slice of lean turkey. With enough of these nuances, it is surprisingly easy to have such a low-calorie day — and you don’t feel deprived.

Having such a lean day one day a week means that on those other days when you inevitably go “over budget,” sort of speak, it all gets compensated for in the end — and the weight stays amazingly stable, no longer so erratic.

Omega 3 Fat Hurdles