Bull Call Spreads vs. Bull Put Spreads

OK I see. I would like to make a change to my original statement:

"Debit spreads have better Risk/Reward Ratios over credit spreads"

And change it to:

"Debit spreads have better or equal Risk/Reward Ratios over credit spreads."

:)
 
Quote from qqqoptions:

OK I see. I would like to make a change to my original statement:

"Debit spreads have better Risk/Reward Ratios over credit spreads"

And change it to:

"Debit spreads have better or equal Risk/Reward Ratios over credit spreads."

:)
More...

How about you change it as:

I used to be an imbecile as ForexForex

to

I am a great or an equally retarded imbecile as qqqoptions
 
Quote from falconview:

Since Atticus says it makes no difference if you are OTM, or itm OR atm.

I was just wondering. I did do some OTM trades a week ago ( and lost ) but they don´t move as rapidly in price as ITM options. So if you put the BOX on two opposing Verticals and made sure they were at least 2 nd strike ITM, I would think you would get some rapid profit there? I think the BOX as I recall reading it, was a Vertical Call Bull Spread and a Vertical PUT Bear spread? I was never sure if they were parallel to each other, or I guess not, if both were ITM.

I sort of wonder how much the market would have to move to give you your profit and you closed the Vertical?

If this sounds like a dumb question it is because I am dumb.
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Falcon my friend. The box, once established, has virtually zero greeks save for rho(rate). A bull call vert and a bear put vert (same-strike) = box arb. The only risk (save for pinning at exp) is to interest rates over the duration of the holding period.

A box is not what you want. It's a method of dissection and price discovery. Box arbs at retail are a loser. Opportunities in boxes increases with rates; as rates trade to zero the microstructure (bid-offer var) begins to overwhelm the gains from boxes, even for MMers attempting to buy the bid.

I price hundreds of "5 and 10" boxes every single day and the average price on the 5s to buy are 4.98 at mid (losers w/comms). It's a financing trade in a period of free money. Paying 4.98 to earn $0.02 (before comms) from 0 to inf.

I will PM you 5 trades next week (first before Noon on Monday) that will be good for +15% on debit (<5% peak to trough DD per trade). Paper or real, doesn't matter. Trade nothing else for a month and reply here as to the outcome. Please do not disseminate the ideas.

IF THEY WORK:

Please promise us all that you'll stop the quixotic obsession.
 
Falconview - the minimum I'd look at strikes right now is Sept and Oct or Jan 13 is fine. I don't like shorter duration strikes and try to get out 2 months before.

To play direction you have to believe that something is going up or down.

As an example:

Since Mid March I've been very bearish, so I bought a Bull Call Spread on TZA 18-24 (July expiration) It cost me 1.30, so max gain was 4.70.

It was difficult to watch the market continue to rise through out April and be losing money, but I was pretty confident that a myriad of stocks were WAY WAY overpriced and would crash - just look at the 1 yr chart on QQQ.

I closed it on Monday when the market was down and made .72 which isn't bad for 1.30 investment. I could have made more had I held, but I rolled out to October, and bought another call spread.

Doing these type of spreads I only have to be right about 1 out of 4 times to break even.

If I pick a stock that I don't want to buy but think has huge potential I will buy out as far as I can and be patient. Right now I think coal stocks are undervalued and I have Jan 13 call spreads on JRCC, PCX, ANR, & ACI.

Now coal stocks might languish for the rest of 2012, and I might lose but I will buy more spreads later in the year when Jan 14 contracts become available or the spreads become tolerable.
 
Quote from atticus:

Falcon my friend. The box, once established, has virtually zero greeks save for rho(rate). A bull call vert and a bear put vert (same-strike) = box arb. The only risk (save for pinning at exp) is to interest rates over the duration of the holding period.

A box is not what you want. It's a method of dissection and price discovery. Box arbs at retail are a loser. Opportunities in boxes increases with rates; as rates trade to zero the microstructure (bid-offer var) begins to overwhelm the gains from boxes, even for MMers attempting to buy the bid.

I price hundreds of "5 and 10" boxes every single day and the average price on the 5s to buy are 4.98 at mid (losers w/comms). It's a financing trade in a period of free money. Paying 4.98 to earn $0.02 (before comms) from 0 to inf.

I will PM you 5 trades next week (first before Noon on Monday) that will be good for +15% on debit (<5% peak to trough DD per trade). Paper or real, doesn't matter. Trade nothing else for a month and reply here as to the outcome. Please do not disseminate the ideas.

IF THEY WORK:

Please promise us all that you'll stop the quixotic obsession.
More...

Anyway you can PM them to me as well? I promise to keep them confidential. Thanks man.
 
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