Search results

He's style is astronomical and he trades planets, galaxies and etc. :D

When you buy straight calls/puts you need to get exactly right 4 things: 1. Direction 2. Magnitude of the move 3. Timing 4. Volatility (with this one you need to be at least not wrong) That is, even if you get direction right you can still lose money if you miss on volatility and timing...

The interaction between the greeks is not that significant so as to make the call price remain constant as the underlying rises. The price/volatility are the main factors here. That is, if you see the underlying rising, but the call price staying flat it means that the Implied Volatility is...

Greeks are the measures of option sensitivity and software like OptionVue or any other software that has an option pricing model can calculate them. The cheapest alternative is the free software that your broker provides (i'm fairly certain that nowadays most option brokers provide this, some...

I'm referring to synthetics that are derived from the put-call parity relationship - that is, any of the 3 elements (call, put, stock) can be constructed using the other two (i.e. a synthetic equivalent). For example, long put plus long stock is the synthetic equivalent of a long call. Long...

How would you do it? Any synthetic combination will yield the available strike prices. I'd like to see how it's done though, if it is possible.

No.

Exactly! Averaging $5K a day means nothing without knowing the capital base. $5K on a $10mil account is only about 14% p.a. compounded. $5K on a $100K account is 323,010% p.a. compounded. Spot the difference!?

Except for direction and timing!

I don't think it's the same thing. Using spot you calculate the cost of carry on index options not on futures options. Actually, disregard my previous post, I'm not certain it is correct. I'll just leave it to more educated people than myself. :)

The difference between Sep and Dec futures contracts should be the cost of carry from Sep to Dec expiry. In fact, the difference between Dec futures and spot DAX should be the cost of carry.

It doesn't matter, you still need to get those 4 factors right.

If you think that the Q's will move up 7.9% from current 38 to 41 by Oct expiry then it may be a good trade.

Just to add to Eliot's post above. When you buy calls you need to get exactly right 4 things: 1. Direction 2. Magnitude of the move 3. Timing 4. Volatility (with this one you need to be at least not wrong) So although buying calls is a very simple transaction in itself, being profitable...

Check out the "Books" section on this site. Also read through the threads on options here, there's plenty of info.

"Options Trading: The Hidden Reality" by Cottle, not exactly the reminiscinces, but a good book. Also check out the "Market Wizards" series as there are some interviews with option traders. "Option Market Making" by Baird gives a good perspective on market makers.

It's always a trade off. By buying more time you have greater chance of the stock hitting your target, but at the same time you greatly reduce your potential profit if the stock makes a quick move towards your target and you are left with lots of time value in the options.

Partial fill generally doesn't increase commissions, unless you cancel/modify the order in which case it is viewed as new order.

That's right, you cannot sell/write warrants like you can options, but that's irrelevant with respect to my point.

Not really, just because the index goes down today doesn't mean that it is more likely to go up tomorrow, unless you have some evidence to support this claim. So the index can go down today, tomorrow and the day after tomorrow and each and every time you will lose money. As I said, unless...