How high can the S&P go?

vulture · Sep 18, 2003

I dont want to speak for Romeo, but as someone who has also employed a similar strategy. One thing that I want to mention is that in a low implied volatility environment like this one, you do have to time the market with more precision, such as Romeo is doing fading intermediate tops and bottoms to collect a better "cushion" on the options writes. In a very high implied volatility environment, with low trend persistence, you can do very well selling far OTM strikes without as much precision as far as timing the options writes. A good example would have been last spring. Obviously, you have a great macro event risk at times of major uncertainty, but that is what you are getting paid for...I think there are certain advantages/disadvantages to this strategy, but at times it is golden...

Mvic · Sep 18, 2003

is what you are getting paid for true enough.

In the case of this strategy would selling options at higher strikes as the price moves against you be considered doubling up (averaging down usually a no no) or because of the depreciation due to time value erosion and due to the nature of the option where you have the premium cushion before you get to break even point this doesn't really apply?

waggie945 · Sep 18, 2003

continues as "at-the-money" calls are being covered by short option players and driving the market higher.

Pabst · Sep 18, 2003

Pabst
Elite Member

Registered: Dec 2001
Posts: 1027

09-10-03 08:21 PM

Nice market call Romeo!

Nice grab on the Ali quote Inandlong!

Cycle low, or explosion up day will be September 18th. You heard it here first.
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Yea babe! Called today on the 10th!

Romeo · Sep 18, 2003

Quote from Pabst:

Pabst
Elite Member

Registered: Dec 2001
Posts: 1027

09-10-03 08:21 PM

Nice market call Romeo!

Nice grab on the Ali quote Inandlong!

Cycle low, or explosion up day will be September 18th. You heard it here first.
-----------------------------------------------------------------------------

Yea babe! Called today on the 10th!

This was such a great call by Pabst, that I'm proud to say he's one of a very select few that has always been with Romeo. And when you hang with winners, you get winners.

And this was a great call Pabst. The only thing I can say is whew!! The S&P didn't get to 1050 by expiration.

waggie945 · Sep 18, 2003

When is the next Cycle?

Romeo · Sep 18, 2003

Quote from waggie945:

When is the next Cycle?

although i'm not #1 today (Pabst is), I hope the cycle goes to 1050, and then cycles on downward. That's my guess.

inandlong · Sep 18, 2003

WTG Pabst!

Mvic · Sep 18, 2003

Pabst. May you have many more (and post them on ET too)

Pabst · Sep 18, 2003

Quote from Romeo:

although i'm not #1 today (Pabst is), I hope the cycle goes to 1050, and then cycles on downward. That's my guess.

Thank's for the acknowledgement guys. The next cycle will indeed be a short opportunity Romeo, and yea I'd say 1050 is as good as anywhere else I can see. I'll be trying to figure out probable dates but my guess is that October's payroll number on the 3rd could be a Huge down day.