You're right, sorry
just got carried away, it's a rainy old night in Sydney and waiting for the market to open.db
Bull Put Spreads for Beginners
- Thread starter OptionsOops
- Start date
just got carried away, it's a rainy old night in Sydney and waiting for the market to open.db
Ok, I'll bite because it's a rainy old nightQuote from Ateht:
Daddysmonkey,
Now, do you have some past profitable trades we can look up in your 348 posts here?
Take your time we have all the time in the world! but, please try to make it this century.
and 16 minutes til market opens.US market:
march 9 2007 sto RUT apr 850/860 call vertical for cr 0.54
april 4 2007 btc Rut apr 850/860 call vertical for db 0.15
Australian market:
april 3 2007 sto SGB apr 34 puts for cr 0.39
april 12 2007 btc SGB apr 34 puts for db 0.10
So, are you impressed? LOL.
Now let's see some of your trades, atit.
db
The evidence resides in my trading account. Maybe if you give me your fax number I can send you my trading statementsQuote from Ateht:
Wheres the evidence daddysmonkey? Show your posts on those trades.
Now, prove to us all your not a daddysmonkey by showing those trades.
.Now I have to get to trading - market opens in 5 minutes and you've wasted enough of our time here, although it was entertaining for a little while.
db
But on the subject of bull put spreads, I`m using IB's demo system to obtain pricing. I`m not sure where it is getting the prices from, but presumably these prices were available at some point.
Buy SPX Dec 2009 1500 put for 130
Sell 2000 put for 588
Credit received: 45800
Value at expiration: 50000
So I`d be paying 4200 in time value for this position, but I would be earning 45800*.05=2290 in interest in the first year. Using these figures the interest earned from the sold put pays for the purchased put, are my figures wrong, or my analysis?
Buy SPX Dec 2009 1500 put for 130
Sell 2000 put for 588
Credit received: 45800
Value at expiration: 50000
So I`d be paying 4200 in time value for this position, but I would be earning 45800*.05=2290 in interest in the first year. Using these figures the interest earned from the sold put pays for the purchased put, are my figures wrong, or my analysis?
I don't know where those numbers came from, but currently that spread is trading at about 260 (355 for 2000 put and 95 for 1500 put). So you are taking in $26,000, with the max potential value of $50,000. So you need to make up $24,000 in interest, and that's a lot of interest to be earned on $26,000 in 969 days.
Found real pricing for SPX chains at optionsxpress. That isn't going to work, is it 
Back to LEAPs, is it possible to buy a 200-150 put spread in a way that reduces my chances of being exercised? Would I be better off trading the legs separately rather than as a spread?
Back to LEAPs, is it possible to buy a 200-150 put spread in a way that reduces my chances of being exercised? Would I be better off trading the legs separately rather than as a spread?
You should not be worried about early exercise on SPX spreads...
Exactly, but how can I get close to the same kind of behavior with regular LEAP options?
I need to rethink this idea then Next idea is to model purchasing the underlying stock using portfolio margin vs purchasing options (I only recently discovered portfolio margin). I`d be paying margin costs on a portion of the stock position, but this would be offset by the dividends received. Instead of increasing my positions over time by buying stock, selling closer to the money puts might get me the stock I want at a better price plus reduce my margin costs.
Next idea is to model purchasing the underlying stock using portfolio margin vs purchasing options (I only recently discovered portfolio margin). I`d be paying margin costs on a portion of the stock position, but this would be offset by the dividends received. Instead of increasing my positions over time by buying stock, selling closer to the money puts might get me the stock I want at a better price plus reduce my margin costs.