Spirit of the Season and all that, I guess! 
Buying/Selling Options
- Thread starter pcgeek86
- Start date
I think I'm upsetting Scott Kramer over at Optionetics. He seems to be having some difficulties dealing with me. LOL.
To answer you question whether he is considered an expert over there, i have provided a link to articles he has authored.
http://www.optionetics.com/market/a...mbol=&keyword=kramer&mode=titletext&curPage=7
Take a look for yourself. His commentary is in line with Optionetics mission to "empower investors" through expensive options seminars.
Quote from rallymode:
To answer you question whether he is considered an expert over there, i have provided a link to articles he has authored.
http://www.optionetics.com/market/a...mbol=&keyword=kramer&mode=titletext&curPage=7
Take a look for yourself.
OMG, that guy actually works for Optionetics? Jesus. Too bad they are not a publicly traded company or I would short the hell out of that thing on Scott alone.
Mav,
I am still a newbi in options. This same debate is simmilar to the one between naked put and covered call. The thing that is hard for us newbies to grasp is the application, meaning, are they being traded exactly the same? Should they be?
I have been watching the show, ur, "debate" since yesterday. What a show! I am not their student but I do visit their forum and that was where I learned the intricacies of their dynamic hedge method, plus the JL Lord's book. I am not interested in the difference or lack thereof between collar and BCS. I am only interested in protecting my 3 largest long stock holdings long term. Each of them amounts to 150k value approximately. Small amount to you, perhaps, but they are my lifelong savings, and would be my retirement.
Deploying collar on them and "dance around" (rolling up and rolling down) the strikes seem to be a reasonable way so I can keep my stock. Therefore, I have 2 stocks on the dynamic collar. I also read RiskDoctor's SlingshotHedge, and deploy one stock on that currently. His hedge is synthecially equivilent to a Fly + a high strike call. I have yet to decide which one strategy would be the one I stick to eventually.
Would you recommend using BCS as hedge or it is simply a trading instrument?
I am still a newbi in options. This same debate is simmilar to the one between naked put and covered call. The thing that is hard for us newbies to grasp is the application, meaning, are they being traded exactly the same? Should they be?
I have been watching the show, ur, "debate" since yesterday. What a show! I am not their student but I do visit their forum and that was where I learned the intricacies of their dynamic hedge method, plus the JL Lord's book. I am not interested in the difference or lack thereof between collar and BCS. I am only interested in protecting my 3 largest long stock holdings long term. Each of them amounts to 150k value approximately. Small amount to you, perhaps, but they are my lifelong savings, and would be my retirement.
Deploying collar on them and "dance around" (rolling up and rolling down) the strikes seem to be a reasonable way so I can keep my stock. Therefore, I have 2 stocks on the dynamic collar. I also read RiskDoctor's SlingshotHedge, and deploy one stock on that currently. His hedge is synthecially equivilent to a Fly + a high strike call. I have yet to decide which one strategy would be the one I stick to eventually.
Would you recommend using BCS as hedge or it is simply a trading instrument?
I would not use the collar to protect your stocks. Because you are cutting off all your upside. I would go with the slingshot hedge from Cottle. At least you can hedge your downside and still have unlimited upside on your stock and earn some juice in sideways markets.
To be honest, I have learned far more from posts and articles (free) on the optionetics site (also free) than from ones on ET. However, ET provides another perspective, which is also very valuable. I'm not sure why waynel is so hostile towards optionetics. After all it's just another learning tool - you don't have to take any of their courses and they've got a lot of good free stuff. Btw the collar/married put is NOT one of the strategies they teach in their seminars, so all this discussion is really a result of someone mentioning the Lord book and people asking questions about it in their forum. Iow it's not something being 'sold' by optionetics. But the 'discussion' so far has been very interesting. I notice that mav lost the argument when mendoza proved that the collar is different from the vertical. As far as I'm concerned the argument is settled. Now it's just down to character assassination, unfortunately. But thanks to Mav and the guys at optionetics for a great discussion.
daddy's boy
Synthetically equivalent to an otm fly and otm long call. Slingshot hedge is a reasonable alternative to the bull spread. Or just use the married put to really let your upside run. Or roll the short call at the appropriate time. As usual, it all comes down to what you expect the underlying to do and how much time you've got to monitor the position and adjust. The 'right way', as always, becomes obvious in hindsight
.A happy and safe New Year to everyone here on ET!
daddy's boy
I did not lose the argument. Put/call parity cannot break down after the fact. That is not what the definition of put/call parity is. Alex Mendoza does not understand this. Once a trade is put on, there are many things that can happen that can alter the payoff between two given spreads. This has nothing to do with put/call parity. Dividends, a change in interest rates, a stock becoming hard to borrow and a large move can all change the relationships between two different spreads. This does NOT mean put/call parity has been proven false. I honestly don't have enough energy left in me to keep debating this point. If you don't see it by now, it's because you choose not to.
That's a little harsh. I did my best to follow the discussion and the conclusions, which wasn't that easy.
The conclusion: you believe you are right and
mendoza/kramer et al believe they are right, especially after the example with the european exercise.
I see what I see, not what I want to believe, as should have been obvious when I first posted my question in this thread asking you why you thought the 'collar book' was crap. I also explained that I was confused and unable to understand why the collar should be superior to the vertical, as a matter of fact I was agreeing with you - until the optionetics examples (as extreme as they may have been) came along and showed that the collar is indeed different from the identical bull spread. Until now I used to think that a synthetic is identical to the real position at ALL points ALWAYS under ALL circumstances. Obviously that is not the case. They are identical MOST of the time under MOST circumstances. THAT IS THE DIFFERENCE and you missed it.
I have no interest in the put/call parity discussion since my question has been answered.
Nowhere did I say, or give the impression, that I choose "not to see". Nor do I enjoy seeing you use profanities on your optionetics posts - totally uncalled for and detracts from your otherwise excellent discussion. Why do you do it?
However, I do appreciate the time you spent in discussing this topic and thank you for that. We've all had an opportunity to learn something new (courtesy of Alex Mendoza), even you Mav, and that's what this is all about (for a relative newbie like me anyway)
.All the best.
daddy's boy