First Post - Intro and First Swipe @ an Options Strategy

[cdcaveman]

Quote from Denver Vol:

I'm a 26 year old real estate private equity analyst and have just started diving into the world of options. I have allocated ~20k to start trading with (though I obviously won't plow it all into an asset class for which I am a complete novice at one time).

Right now I am of the mindset that this market is massively frothy. I have exited nearly all of my long equity positions, and would like to execute a bearish strategy over the next 9-12 months, at least.

My initial thought is to buy short term, slightly out of the money index calls (most likely on the S&P), while simultaneously buying longer term (6-12 month maturity), further out of the money puts.

Thematically, I expect a fairly significant, broad market correction in the medium term, but I would like to maintain some small upside if this market gets even more out of whack. I want far more exposure to a market correction than I do to continued upward movement.

I'm here to deepen my knowledge of options trading and refine my strategy, so feel free to call what I have outlined above a complete joke. I'm looking forward to your responses.

i get your thoughts.. leave yourself expose to the upside near term.. and buy long term downside skew.. typically downside skew is expensive.. and more so when the market is up.. coming from the are of work that your in i would consider doing some studies related to volatility.. your buying different forms of volatility and distribution that you have no yet quantified.. therefore respectively your shooting off the hip..

trade small relative to your allocation , reduce your size as you lose.. your trying to thread the needle by calling direction both short term and long term.. then on top of that your making assumptions on the implied s that your buying that you haven't yet quantified what they mean.. where will your position be in a month over X values.. any idea?