Recent content by lowvoltrader

If you sell an ATM or just OTM vertical spread you may be close to achieving your goal without using calendar spreads.

"Trading options in Turbulent Markets" by Larry Shover

The credit is about half the difference in strikes for almost ATM verticals which makes sense. What would be interesting would be to see how the results stack up if the popular "buy in November, sell in May" timing rule were overlaid on the strategy. In this variation, the strategy would be...

I may be able to explain the difference in his income and wealth figures. (Just an educated guess, no inside info.) My guess is that he divested himself of all assets years ago. So he moved the money into trusts or corporations which he may control or trade for, but he himself has almost no...

this is an interesting discussion. i'd like to use some real numbers. selling the jul 740 put at 23.39, long the aug 740 put at 25.88, short the jul 770 call at 9.41, long the jul 780 call at 7.1. the put calendar debit is roughly offset by the call vertical credit. is that an important part...

Great! I'm glad we're able to restart this discussion. OK, now, how do you trade this position? It's best if we start with a hypothetical. stock at 58. june 60 call at 2. june 55 put at 1 (I'm just making up some numbers). if the stock goes down, my position is a synthetic bearish call...

i suggest checking out my previous thread on married puts and collars...on the internet d a search for ZRadioactive Trading, Kurt Frankenberg, and he has posted some educational videos on you tube also....good luck

I find this topic of great interest. I believe it's unrelated to a long put vertical. Either its a true reverse collar (short stock at say 58, long 60 call, short 55 put) or it's an interesting way to trade short stock versus long synthetic stock (same as above but with short put at 60 strike...

hi! i would like to understand 4Q's methods of trading these "reverse collars". The basic position is short stock with long calls and short puts. Are the options at the same strike? How would an up or down move in the stock be handled to capture profit? I hope this discussion can be...

MTE correctly notes that long stock & short synthetic stock is a basic arb play so the divdend will be priced in; and xflat notes that the concept can work --- if it's done in huge volumes of contracts. However by structuring the trade creatively, and taking on some extra risk, it may be...

this is an interesting question. A simple a long stock, short call postion is unlkely to have a long term postive return as the market is too efficient and prices the dividend into the call price. Perhaps you could compare a short aganst the box poston (long stock, short synthetc stock = long...

hi! I omitted the cost of the 55 call which is .61 (90 days to expiration iv 35%). had we done the 35-45-55 fly the net cost would be 6.56-2*3.38+.61-2.88 = 2.47 NET CREDIT!!!

OK, I'll take the challenge to illustrate with numbers. Im using a b-s calculator so all prices are hypothetical modeled prices with iv of 35%. stock at 40, 120 days, 35 call 6.56, 45 put 6.08, total cost 12.64 of which 2.64 is time value. we'll close strangle if theres no large move in sixty...

thanks to richard rimes for pointing that out; mea culpa! I find this topic interesting though. Suppose we consider it from the view I had. With stock at 40 , Long a gut strangle 35-45. If tock moves up sell the 45 call and 45 put to lock in a vertical debit spread at possibly a credit...

hi folks! I believe serrows original post was misunderstood. What i think he/she was getting at is being LONG (not short) the DITM gut strangle then if the underlying moves, selling a juicy (in time value) ATM option against it. Its a strategy that seems to have merit as long as the gut...