Buying/Selling Options

Quote from RichardRimes:

At this point I'm only trading options as well...however I can't say I'm consistently making money...make lots...lose lots...make lots..etc :p
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When I said consistent profit, i compare it with the time when I only traded stocks. I am still a junior option trader, a lot way for me to learn.:D
 
Quote from RichardRimes:



I will make more money consistently trading an option book.


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No you are starting to sound like them lol..

"option book"

Next you will be telling us how you trade curvature and try and cross-hedge your vegas.
 
Quote from optioncoach:

No you are starting to sound like them lol..

"option book"

Next you will be telling us how you trade curvature and try and cross-hedge your vegas.
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Coach,

Are you trying to avoid the fight in your own thread? LOL.

Sorry to start the war there. This is the only way to learn in a public forum.
 
It is a good discussion so I have no intent to stop it :). But I learned to never take sides in an opinion battle ;). But the exchange of ideas is certainly interesting.
 
Quote from optioncoach:

No you are starting to sound like them lol..

"option book"

Next you will be telling us how you trade curvature and try and cross-hedge your vegas.
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You begin to sound like, you know who. :)
 
Synthetic Butterflies???

Since becoming involved in these Boards I have read many postings where the author is quite sold on synthetic equivalencies.

I'm still learning this concept, but quite intrigued. One of my long time favorite strategies is the Butterfly. Thus, I ask: Are there synthetic equivalencies for Butterflies? If any of you say the answer is yes, I would be most appreciative of either a complete explanation, or if you could point me in the direction where I could read up on this question.

Thanks in advance.

Bob
 
Quote from exQQQQseme:

Synthetic Butterflies???

Since becoming involved in these Boards I have read many postings where the author is quite sold on synthetic equivalencies.

I'm still learning this concept, but quite intrigued. One of my long time favorite strategies is the Butterfly. Thus, I ask: Are there synthetic equivalencies for Butterflies? If any of you say the answer is yes, I would be most appreciative of either a complete explanation, or if you could point me in the direction where I could read up on this question.

Thanks in advance.

Bob
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Bob,

Sure there are. For example, a long 40/45/50 call butterfly is equivalent to a long 40/45/50 put butterfly and also equivalent to a short 40/45/50 iron butterfly (a short 45/50 call vertical + a short 40/45 put vertical). You can also substitute any of the legs with it's own synthetic equivalent. And so on and so forth. The possibilities are endless!

You can find more info in any decent options book as synthetics are based on the basic option pricing relationships like put-call parity (long stock+long put=long call or short stock+long call=long put) and the box spread (long call vertical is equal to the short put vertical at the same pair of strikes and vice versa). In other words, any imaginable option position has a synthetic equivalent.
 
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