How long $3000 will last option trading

There is some speculation built into the AMD price and the rumor was the Dell was going to annouce today on it. They came out and said that they have no plans to use AMD and after hours AMD was down to around 40.50. It has since recovered to 4.90 or so. Seems like you'll be safe, but monitor closely!
 
BOT +1 AMD 100 FEB 06 40 PUT @.10, AMD MARK 40.90

Made about $35 on this one. I decided to set buy limit for 10 cent to avoid any trouble.

SOLD -1 AAPL 100 MAR 06 80 CALL @.55, AAPL MARK 70.56

I was assigned aapl and decide to keep it. My price after premium was around $78.20. I still have paper lost on this one and will try to sell some call to reduce the basis.
 
This morning:

Sold Mar GM 20/22.5 Put for $0.70 GM was around 22.6. It seems to come up quite a bit against by view.

Total credit $1.70 on GM iron-fly 20/22.5/25.

Update: I just looked at the end of day quote. GM dropped back to $21.92. Yike!
 
Quote from skanan:

This morning:

Sold Mar GM 20/22.5 Put for $0.70 GM was around 22.6. It seems to come up quite a bit against by view.

Total credit $1.70 on GM iron-fly 20/22.5/25.

Update: I just looked at the end of day quote. GM dropped back to $21.92. Yike!
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your max loss is .80...big deal? no? I mean thats seems very good R/R
 
That's right. It's not a big deal in term of max lost. However, if I do this IB at the beggining, the max lost could have been less. This adjustment gave me negative expectancy. If I do this for 10 contracts, I won't feel comfortable at all.

-Nick

Quote from DonnaV:

your max loss is .80...big deal? no? I mean thats seems very good R/R
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Quote from skanan:

That's right. It's not a big deal in term of max lost. However, if I do this IB at the beggining, the max lost could have been less. This adjustment gave me negative expectancy. If I do this for 10 contracts, I won't feel comfortable at all.

-Nick
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I see what you are saying...legging in cost you rather than helped you
 
Quote from Gueco:

where can I learn more about credit spreads and iron condors etc? Is there a book or something?

thanks
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If you understand the basics of options and volatility (the greeks) then reading coach's thread spx credit spread from the beginning is an excellent resourse on the OTM IC..probably the best since most have included real time postings and adjustments etc.

If you need a better understanding of options...good books by Natenberg "Option Volatility & Pricing" and McMillian "Options as a Strategic Investment" were very helpful to me.

Depending on where you live thinkorswim gives free options seminars which are excellent..Options 101 very basic 3-4 hr course..."Beyond the Basic's" is a full day and will cover Greeks, all the basic and a few complicated strategies. Over on Yahoo there are two option groups "optiontrading coach" and "the option club" if you read those threads from the beginning also very interesting and helpful. Good Luck and I'm sure Nick will add his thoughts.
 
Beside excellent suggestions by Donna, I'd like to emphasize on TOS seminar. If I do that first, it would have saved me a lot of money in the beginning.

Books do not teach you how to trade. You have to learn it in ET forums.

It's worth the effort to read these trades from the beginning

SPX credit spread trader
http://www.elitetrader.com/vb/showthread.php?s=&threadid=49586

Writing Option for a living
http://www.elitetrader.com/vb/showt...highlight=selling option living&pagenumber=66

Calendar Spreads
http://www.elitetrader.com/vb/showthread.php?s=&threadid=21192&perpage=6&pagenumber=1

Riskarb's combo to fly conversion journal
http://www.elitetrader.com/vb/showthread.php?s=&threadid=62104

Other trades which are my favorite:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=58716
http://www.elitetrader.com/vb/showthread.php?s=&threadid=58328&perpage=6&pagenumber=64



Beside Optioncoach, I like to read message posted by MoMoney, Maverick74, ChrisM, and Riskarb. Beware though, sometime Riskarb posted in Gealic.
 
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