You should stay in your own thread, that's your comfort zone.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=225849
My OPTION TRADES..... part 2
- Thread starter Put_Master
- Start date
You should stay in your own thread, that's your comfort zone.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=225849
Just as you were doing with your famous diatribe against spread traders you are making up a bunch of idiot moves that would crash an account if someone did those moves... and attributing them to me.
I suspect that you have, in the past, crashed YOUR account doing these things which explains your irrational fixation.
I am sure that it is possible, through a series of bad judgements, to crash an account that is using spread trades... just as it is possible to crash an account using any other strategy.
So what??
When you repeatedly made your diatribe against spread traders (apparently your version of zionist pigs) I went through all your attributions to spread traders at the time and demonstrated that you don't know what you are talking about... I really don't want to repeat that exercise here.
e.g. When you are spread trading you almost never take a stock because it has passed into your spread range. That is what YOU do when you sell naked puts. If I go into Expiration Saturday with a spread that has been violated by the stock price my broker will NEVER take the stock... the default action is to pay the loss on the spread... that's why you do spreads. If for example, my spread is violated by a 'few pennies' as you say the size of the loss will be quite small and will most likely be covered by the premium I recieved on setting up the trade... plus the gain on the long put.
After ten years of trading options, I don't think I have ever gone into expiration with such a condition, indeed I can't remember ever having a stock violate my spread range... I always make a move before that happens. e.g. close it, roll it etc.
There are many other attributions you make that would simply represent bad judgement. All that proves to me is I wouldn't want you managing my account.
e.g. Allocating one's whole portfolio to spreads, especially all bull put spreads would be very irresponsible. If you paid attention to what I DO say instead of what you make up for me to say you would recognize that I put a high priority on diversification of my portfolio among bullish and bearish trades and among counter market trades like trades on TLT and SH... spreads or not spreads. That is why I have said repeatedly that the postings I make in the Conservative Options Thread are 'Trade discovery' not portfolio management.
For some reason you are fixated on this issue and make up straw men so you can have arguments with your self and win.
In short... you are nuts.... and I hope no one is letting you manage a real account... I doubt you are sane enough to walk the street alone.
I suspect that you have, in the past, crashed YOUR account doing these things which explains your irrational fixation.
I am sure that it is possible, through a series of bad judgements, to crash an account that is using spread trades... just as it is possible to crash an account using any other strategy.
So what??
When you repeatedly made your diatribe against spread traders (apparently your version of zionist pigs) I went through all your attributions to spread traders at the time and demonstrated that you don't know what you are talking about... I really don't want to repeat that exercise here.
e.g. When you are spread trading you almost never take a stock because it has passed into your spread range. That is what YOU do when you sell naked puts. If I go into Expiration Saturday with a spread that has been violated by the stock price my broker will NEVER take the stock... the default action is to pay the loss on the spread... that's why you do spreads. If for example, my spread is violated by a 'few pennies' as you say the size of the loss will be quite small and will most likely be covered by the premium I recieved on setting up the trade... plus the gain on the long put.
After ten years of trading options, I don't think I have ever gone into expiration with such a condition, indeed I can't remember ever having a stock violate my spread range... I always make a move before that happens. e.g. close it, roll it etc.
There are many other attributions you make that would simply represent bad judgement. All that proves to me is I wouldn't want you managing my account.
e.g. Allocating one's whole portfolio to spreads, especially all bull put spreads would be very irresponsible. If you paid attention to what I DO say instead of what you make up for me to say you would recognize that I put a high priority on diversification of my portfolio among bullish and bearish trades and among counter market trades like trades on TLT and SH... spreads or not spreads. That is why I have said repeatedly that the postings I make in the Conservative Options Thread are 'Trade discovery' not portfolio management.
For some reason you are fixated on this issue and make up straw men so you can have arguments with your self and win.
In short... you are nuts.... and I hope no one is letting you manage a real account... I doubt you are sane enough to walk the street alone.
As with my ist question for Dan, I will now answer the 2nd question for him as well:
If those 5 spreads I discussed closed just a few pennies below your lower strikes, your $100,000 account would be wiped out. Bankrupt. Empty.
Dan thinks that because he is not being charged margin interest, that he is not using any leverage.
And yet, I clearly demonstrated his $100,000 account would need ONE MILLION DOLLARS, if he wanted to buy those stocks, if they were put to him.
And his $100,000 account would be worth nothing, (wiped out), if he let the stocks trade just a few pennies below his lower strike.
On the other hand, if he closed them all while the stocks traded right in the middle of his 2 strikes, his loss would still be massive.
Dan thinks by going deep OTM, he doesn't have to worry about his stocks trading between or below his strikes.
What he fails to realize is, because of the 2 extreme choices he faces, of either coming up with ONE MILLION DOLLARS, or being wiped out,..... he can not risk letting his stocks come even close to his upper strikes.
He must close them down long before they even get close to the upper strike.
Hence, that deep OTM safety cushion he thinks he has, does not actually exist. Only in THEORY WORLD.
In REALITY WORLD, if the stock is trading at $56, and his upper strike is $45, he'd better close it long before it hits $45.
Waiting until it tests $45, is waaaaay too risky.
It will be very expensive to close it once it dips below $45.
And the deeper it drops the more expensive it becomes.
Keep waiting and "hoping", and you risk your account being wiped out.
WHY? Because as my earlier example showed, his $100,000 account can't afford to buy the MILLION DOLLARS worth of stocks. Thus you must close the trades early for a massive loss.
Since we are playing the on-up game I have a question for Puts_master:
Since I demonstrated that the 10/6 spread on ARO is a superior trade why are you insisting on the naked put???
Since I demonstrated that the 10/6 spread on ARO is a superior trade why are you insisting on the naked put???
Just as you were doing with your famous diatribe against spread traders you are making up a bunch of idiot moves that would crash an account if someone did those moves... and attributing them to me.
I suspect that you have, in the past, crashed YOUR account doing these things which explains your irrational fixation.
I am sure that it is possible, through a series of bad judgements, to crash an account that is using spread trades... just as it is possible to crash an account using any other strategy.
So what??
When you repeatedly made your diatribe against spread traders (apparently your version of zionist pigs) I went through all your attributions to spread traders at the time and demonstrated that you don't know what you are talking about... I really don't want to repeat that exercise here.
e.g. When you are spread trading you almost never take a stock because it has passed into your spread range. That is what YOU do when you sell naked puts. If I go into Expiration Saturday with a spread that has been violated by the stock price my broker will NEVER take the stock... the default action is to pay the loss on the spread... that's why you do spreads. If for example, my spread is violated by a 'few pennies' as you say the size of the loss will be quite small and will most likely be covered by the premium I recieved on setting up the trade... plus the gain on the long put.
After ten years of trading options, I don't think I have ever gone into expiration with such a condition, indeed I can't remember ever having a stock violate my spread range... I always make a move before that happens. e.g. close it, roll it etc.
There are many other attributions you make that would simply represent bad judgement. All that proves to me is I wouldn't want you managing my account.
e.g. Allocating one's whole portfolio to spreads, especially all bull put spreads would be very irresponsible. If you paid attention to what I DO say instead of what you make up for me to say you would recognize that I put a high priority on diversification of my portfolio among bullish and bearish trades and among counter market trades like trades on TLT and SH... spreads or not spreads. That is why I have said repeatedly that the postings I make in the Conservative Options Thread are 'Trade discovery' not portfolio management.
For some reason you are fixated on this issue and make up straw men so you can have arguments with your self and win.
In short... you are nuts.... and I hope no one is letting you manage a real account... I doubt you are sane enough to walk the street alone.
I repeat myself because you keep ignoring what I say... are you foaming at the mouth yet???
I suspect that you have, in the past, crashed YOUR account doing these things which explains your irrational fixation.
I am sure that it is possible, through a series of bad judgements, to crash an account that is using spread trades... just as it is possible to crash an account using any other strategy.
So what??
When you repeatedly made your diatribe against spread traders (apparently your version of zionist pigs) I went through all your attributions to spread traders at the time and demonstrated that you don't know what you are talking about... I really don't want to repeat that exercise here.
e.g. When you are spread trading you almost never take a stock because it has passed into your spread range. That is what YOU do when you sell naked puts. If I go into Expiration Saturday with a spread that has been violated by the stock price my broker will NEVER take the stock... the default action is to pay the loss on the spread... that's why you do spreads. If for example, my spread is violated by a 'few pennies' as you say the size of the loss will be quite small and will most likely be covered by the premium I recieved on setting up the trade... plus the gain on the long put.
After ten years of trading options, I don't think I have ever gone into expiration with such a condition, indeed I can't remember ever having a stock violate my spread range... I always make a move before that happens. e.g. close it, roll it etc.
There are many other attributions you make that would simply represent bad judgement. All that proves to me is I wouldn't want you managing my account.
e.g. Allocating one's whole portfolio to spreads, especially all bull put spreads would be very irresponsible. If you paid attention to what I DO say instead of what you make up for me to say you would recognize that I put a high priority on diversification of my portfolio among bullish and bearish trades and among counter market trades like trades on TLT and SH... spreads or not spreads. That is why I have said repeatedly that the postings I make in the Conservative Options Thread are 'Trade discovery' not portfolio management.
For some reason you are fixated on this issue and make up straw men so you can have arguments with your self and win.
In short... you are nuts.... and I hope no one is letting you manage a real account... I doubt you are sane enough to walk the street alone.
I repeat myself because you keep ignoring what I say... are you foaming at the mouth yet???
Also this is Ryanpatrick's thread which has been hijacked by you... just as you hijacked my Conservative Options thread... which you seem to think is OK.
Quote from danshirley:
Just as you were doing with your famous diatribe against spread traders you are making up a bunch of idiot moves that would crash an account if someone did those moves... and attributing them to me..... When you are spread trading you almost never take a stock because it has passed into your spread range. That is what YOU do when you sell naked puts. If I go into Expiration Saturday with a spread that has been violated by the stock price my broker will NEVER take the stock... the default action is to pay the loss on the spread... that's why you do spreads. If for example, my spread is violated by a 'few pennies' as you say the size of the loss will be quite small and will most likely be covered by the premium I recieved on setting up the trade... plus the gain on the long put.
I'm not making any moves that would crash an account.
All I did was set up a 5 stock, 5 gap spread portfolio, within a $100,000 account. I then asked you 2 simple questions which you refused to answer.
When you say your broker will NEVER take the stock, you are correct. Because he can't. You don't have the choice.
If your spread is violated by a few pennies, you seem to think your puny credit will cover it.
WRONG. Not even close.
Between your stock dropping, IV rising, and time decay being of no help to you, because of your several month long contracts, and your stock now trading ITM,..... your losses will be a lot more significant than you think.
In addition, the wider your strike gap, the less help it is when closing down a spread trade. And most of your gaps are 5 point gaps.
THe more narrow your strike gap, the less damage is done when closing for a loss.
Those deep OTM cushions you have, exist only in theory.
If you dare risk waiting for the stock to trade between your strikes, before closing the trade down, you are in for a nasty surprise.
Even closing down close to your strike will be hurt more than you know.
Because I'm not on nearly the amount of leverage you are on via my naked puts, i can afford to buy and hold, collect dividends, sell covered calls,... if the stocks are put to me. It's nice to have that choice.
You have no choice. You must close your spread or risk being wiped out.
I'm not saying no one should sell spreads. All I'm saying is, be aware of the risks. Given your inability to answer my 2 simple questions, you are someone not fully aware of the risks.
Perhaps now you are.
Your narcisstic egocentrism is hilarious.
http://www.winning-teams.com/narcissism_causes.html
And you are so far gone you don't even know how rediculous you are.
http://www.winning-teams.com/narcissism_causes.html
And you are so far gone you don't even know how rediculous you are.
I disagree that your theoretical spread is superior.
I sold 30 contracts at a strike of $10 and a credit of $0.25. Exp Oct.
Thus I am risking $30,000 to earn $750,.... before costs.
Tell me how much money you potentially put at risk to earn the same $750 in the same unit of time.
How many contracts?
You can look up what the $6 leg would cost.
Lets see if Dan finally answers a simply question.
You can ask your broker to look up what the $6 credit would have been on the day I initiated the trade.
Lets compare my "reality" numbers, compared to your THEORY WORLD fantasy. Things always seem better in a fantasy world, of make believe numbers and theories.
The numbers are in the table I already gave you. Try looking at them before you pursue your usual I am always right diatribe.
The spread is superior whether you have 1 contract or 30.
There are no theories or make believe quotes involved...I drew those numbers directly from the FBBO quotes.
The simple truth is you have no idea what you are talking about and take it on yourself to lecture others with more information and skills than you.
A prime symptom of a NPD.
The spread is superior whether you have 1 contract or 30.
There are no theories or make believe quotes involved...I drew those numbers directly from the FBBO quotes.
The simple truth is you have no idea what you are talking about and take it on yourself to lecture others with more information and skills than you.
A prime symptom of a NPD.