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Options and strategies have been written about for a long time, are you saying don't trade any options, or only the strategies that have never been written about?

You put on a calendar spread with the stock at 27.50, the IV is 55. Sell the March 30 call for .90 and buy the April 30 for 1.35. By March expiration the stock is 28.50 and the IV has fallen to 35. You captured all the March premium, however your April 30 is less than .90. What could have/or...

Jack Hershey wrote: Market pace. I trade a fractal that represents the market pace. I also watch the next fastest fractal for anticipation. Jack, could you explain that statement in alittle more detail?

You are correct and thank you for the explanation. The lock to arb a price difference is a conversion, what I explained becomes a conversion from a hedged position. Took alittle bandwich to get though to me.:)

Iceman, Long ABC at 60, Long March 65 put 5.75. Your risk is .75 no matter where ABC is at expiry. At 50 you exercise your put and sell for 65= .75 risk, the premium paid. Ten days from now ABC at 65, the March 65 call is 1.75, you sell and lock in 1.00. If thereafter ABC goes to 75 you are...

Lobster wrote: Check the quotes, you will find that this exact scenario has already been factored in by the markets: Market value of short put plus long call is exactly market value of stock plus interest difference for the time until expiration. Well, not exactly. It's usually a little more or...

Riskless, To turn the long stock, long put into a conversion you need to be long an ITM put, more intrinsic value and less premium. The OTM put is all premium. The premium you pay on the ITM put is your risk, which will be less risk than the OTM put. Anything you sell the same strike call...

You have to be a mighty good stock picker to make a conversion/reversal work without having the benefits of being on the floor. If you thought XYZ was going up, you buy the stock and an ITM put first, risking the premium you paid for the put, looking to turn it into a conversion. You can...

It can take some time for a trader to learn the markets. Example: I can walk up to a piece of heavy equipment (let's say a track-hoe) and look at it for a while, having never run this equipment before, I can inspect it and trace the hydraulic lines from the levers to the various parts of the...

I understand what you mean now. Doubtful the call would be 1.25. The example was to point out theory and I used convenient numbers to explain it. Thanks for the explanation.

GATrader: There were 2 examples on this thread: If you are long ABC stock at 30 and long a 30 put for 1 1/2 and the stock goes to 26, and the 30 put is now 5 1/4 and the 25 put is 1/2, what would you suggest doing? An example would be XYZ trading at 35, put on a vertical bear call...

IndexTrader wrote: So your intent would be to repeat this process over & over? Yes, because it lowers your breakeven so far for only .25 more risk. Usually what happens after the stock makes a move in such situations is that at least 1 or both of those options could only be liquidated...

AAA wrote: I don't pretend to be an expert on this type of analysis, but my experience as a trader is the first loss is usually the best one. Nor am I an expert and the more I post the more evident it will be, and I agree wholly with first loss best loss. Everyone is different and for me...

Quote from patefern: If you are long ABC stock at 30 and long a 30 put for 1 1/2 and the stock goes to 26, and the 30 put is now 5 1/4 and the 25 put is 1/2, what would you suggest doing? -------------------------------------------------------------------------------- Indextrader wrote...

AAA and Index, you are correct about the costs, and like everything else there are drawbacks and benefits to everything. As to being confident about a trade, I'm never confident and always wary, and yes, if I can figure a way to eat my cake and yours too I'll try. Would either of you, or...

Probably nothing if up 1, want the theta to work on the short call. Using the XYZ example, if the spread was up 3, stock at 32. Depending on a number of factors,(delta, prices)I could buy back some short 35 calls, closing out some of the position, but I would rather buy the stock at 32 and buy...

Cover the short call. Can't think of anything else without adding more risk trying to salvage the position. I didn't have an answer to the repair strategy question I asked so I can't spring it on you.

Are you saying that no matter what happens to a stock or option position that goes against you it is better to not buy/sell options as a hedge? If you are long ABC stock at 30 and long a 30 put for 1 1/2 and the stock goes to 26, and the 30 put is now 5 1/4 and the 25 put is 1/2, what would...

Not in love, have no position in any spread gone wrong at this time, XYZ just an example. Just like being prepared, knowing what to do if X happens. However, I do love making a strong effort.

Yes, "a plan" is what I am trying to formulate. Preserving capital is vital and because of the versatility of options with different strikes, puts, calls, months, I want to make an effort to try to salvage a position with all the available options.(no pun intended) A calendar spread might...