Search results

got it. so it does have to do with volatility. why is it always volatility! :) Robert, the reason i'm purchasing the puts and calls with 80 deltas, rather than calls with 20 deltas, is because i would like for the position to profit if it goes down as well. if the underlying goes down, the...

I'm buying the 80 delta put and 80 delta call because i'd like to capture a significant move in the underlying stock... ideally, whichever way the underlying moves, eventually the net + or - delta would help me profit. but, as i mentioned in my original post, if the underlying swings up, the...

Thanks Robert. I may titled the thread incorrectly... instead of buying options with a delta of 50, i'm experimenting with deltas of 80. I don't believe this is happening due to time decay, since i notice these losses in 1 or 2 days, pretty much immediately after i purchase the options. Would...

Hi all, I purchased 3 calls, each with a delta of 80, expiring in 2 months. I purchased the same with 3 puts... each with a delta of -80, expiring in 2 months. So the total call delta is 240, and the total put delta is -240. Now, when the underlying stock moves up, I notice the deltas on the...

well, thanks to everyone here for your input! as always, every bit helps. back to the trading screen :):)

If not by dollar amount, what determines the value of the option? From what i've observed, it seems that call premiums are way too much cheaper than put premiums. they seem to be on opposite ends of the spectrum, so to speak. and this huge difference in value doesn't help when building a...

Tom, Aside from collars, pretty much every other trades i've looked at, whether they are credits spreads, debit spreads, condors, etc... the premiums that you collect when you sell any option leg are horrific. they are too cheap... a miserable couple of tens of dollars. and it screws up the...

The part that i do understand is that QE lowers interest rates which affects the call and put premiums... however i didn't know that prices were affected that significantly as what you see on the options chain. But how is this tied to upward drift.... Tom? Help! :D:D

Got it Maverick... I see what you're saying.

ok, i got that. would a trade exist where , using your example, you buy the put for 1 dollar, and sell the call for around 70 or 80 cents? I come across examples such as those on different articles, but can never find anything near this on the options chain. My guess is even those don't...

ha! yup, there's always courses out there for a couple of thousand! haven't taken them, but i'm pretty sure you'll end up in square one after the class is over.

Correct... the trades i am looking at are not the same strike. the put would be ATM or close to it, and the call would be OTM. but the prices are all horrific. The calls can only cover a small percentage of your put. I guess this goes back to QE affecting interest rates?

Hi Martinghoul, I think what Tom_czr is implying is that QE is affecting interest rates which in turn is keeping the call option premiums low (correct me if i'm wrong Tom). This is why you can't collect a high enough premium to pay for the put insurance. There's actually a lot of...

very interesting! i didn't think QE had this much effect on options prices. it does make sense though. I guess we have to wait a while for options prices to re-adjust to their normal levels then. Thanks.

Hi, I was hoping someone can help me on this... I always read about costless collars or near costless collars. This is where you own 100 shares of the underlying, purchase an ATM put for downside protection, and then sell an OTM call and use the that collected premium to help purchase the put...