Got it Maverick... I see what you're saying.
costless collars
- Thread starter Ozzy_34
- Start date
Got it Maverick... I see what you're saying.
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!
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 trade because you're profit is miserable. but of course what the books and articles show are much better prices on all these different strategies. when you look at the options chain though all i can say is
. The prices suck.
Does this all have to do with QE?
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 trade because you're profit is miserable. but of course what the books and articles show are much better prices on all these different strategies. when you look at the options chain though all i can say is
. The prices suck.Does this all have to do with QE?
This all has to do, at least partly, with volatility being very low. Is QE is to blame for this? To some extent, probably...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 trade because you're profit is miserable. but of course what the books and articles show are much better prices on all these different strategies. when you look at the options chain though all i can say is
Does this all have to do with QE?
What exactly do you mean by fwd SPX price? I think I have written it clearly.
I trade options from 2008, so far successfully so I am confident about my numbers
Not caused, by increased. Read pls my prior posts. I have described my expanation clearly.
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 trade because you're profit is miserable. but of course what the books and articles show are much better prices on all these different strategies. when you look at the options chain though all i can say is
Does this all have to do with QE?
True, market has changed a lot.
Though it is possible to find nice prices, for example ITM verticals have very nice prices compared to probabilities of market moves. Generally OTM call verticals have good prices for buying instead of selling as most of traders were used to... etc. etc.
Well, best of luck to you... If I could offer you some advice, I would suggest you look into how fair value stock/index fwd prices are determined (cash-and-carry and all that jazz).What exactly do you mean by fwd SPX price? I think I have written it clearly.
I trade options from 2008, so far successfully so I am confident about my numbers
This is maybe how others determine fair value stock/index fwd prices. I do it my way since I have always been different in everything
Anyway thanks for suggestion, I appreciate every feedback, every idea.
Perhaps he's saying that the upward drift that we has encouraged makes the calls cheap to him. It's his non-risk neutral valuation model.
As to why he would have different valuations for Buying vs selling a call, in don't follow.
I like how in one thread he's an arrogant jerk and in this thread comes off as ignorant.