And, Atticus is a champ at this. We may not agree on everything, but he knows his stuff. And, yeah, paying that last nickel might be ok, you never know.
Don
My option trades
- Thread starter ryanpatrick
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And, Atticus is a champ at this. We may not agree on everything, but he knows his stuff. And, yeah, paying that last nickel might be ok, you never know.
Don
I just don't know how frowned upon it is to not close the whole position at once. At any rate, I got stopped out for no loss on the trade at 137.48. That's why I prefer this to straight calls like Don suggests, at 137.48 I would have lost almost 25%. The butterfly provided a nice cushion and I get to see which way it would head today without losing any money, with the possibility of a nice profit on the upside.
on my basket of equities that calls are sold against i constantly buy them back...i rarely ever let them expire. doing such has saved me a lot of money. same goes for sold puts...never ever look for last 10 cents.
Quote from falconview:
The divorce story was really good for a chuckle. I´m smiling still while typing. Been there done that!
I kind of figured the delta adjustments would be selling shorts. I had a vision in my mind, trying to picture it working as a teeter totter.
I´m not sure how I would work this though on a short time frame. You misunderstand me, I do not normally trade under 90 to 60 days, or three months out, straight buying. Though a short in a calendar would be First month of course.
I was trying to picture the normal weekly bar fluctation and on how you would profit from it in say a 5 day, or one week swing trade.
The short would be the play, as the buy side of the calendar would be third month out and fairly stable. The short side though would be a balance between THETA and and market action. I guess if you caught the down swing on the weekly bar, you could buy back your short sale and then repeat again? On the up swing you would sell the long contracts.
Delta neutral seems to be adjusted from what you said, by selling more contracts as the market fluctuates in the first month.
Thats the way I´m picturing it right now.
You must be in your 70´s Don?
Gonna have my breakfast and a cup of tea, then I´m going to walk down to the beach and take my swim. Priorities, priorities, priorities! Man am I glad to be out of that darned gambling trade. What a relief !
Just turned 62 on Valentines day (born at 2:14AM on 2/14, LOL).
OK, back to whether to buy or sell.
From Investopedia:
While there are certainly many viable options-buying strategies available to traders, options expiration data obtained from the CME covering a three-year period suggests that buyers are fighting against the odds. Based on data obtained from the CME, I analyzed five major CME option markets - the S&P 500, eurodollars, Japanese yen, live cattle and Nasdaq 100 - and discovered that three out of every four options expired worthless. In fact, of put options alone, 82.6% expired worthless for these five markets.
Read more: http://www.investopedia.com/articles/optioninvestor/03/100103.asp#ixzz1nytSffu6
And, if you do the math, well, you see what I mean. Betting on stocks staying in a range instead of some wild breakout, just seems like the "prudent thing to do."
I just hate seeing that time decay fade everyday if long. Love it when I see it hit the account daily.
Again, just FWIW,
Don
In Vegas 'Vegas Baby' - if you make it, I'll buy.
Don
Okay! Let me look up GAMMA again. I must have learned it 30 times but never remember.
Okaaay! Let me see if I understand this?
I have a calendar spread. First month sold, third month bought.
Price moves down, I buy back, the sold front month options. To keep the delta numbers even.
Price moves up, I start selling the front month options. To keep the delta numbers even with the third month.
The speed with which the DELTA number changes is called GAMMA?
I have a calendar spread. First month sold, third month bought.
Price moves down, I buy back, the sold front month options. To keep the delta numbers even.
Price moves up, I start selling the front month options. To keep the delta numbers even with the third month.
The speed with which the DELTA number changes is called GAMMA?
Quote from falconview:
Okaaay! Let me see if I understand this?
I have a calendar spread. First month sold, third month bought.
Price moves down, I buy back, the sold front month options. To keep the delta numbers even.
Price moves up, I start selling the front month options. To keep the delta numbers even with the third month.
The speed with which the DELTA number changes is called GAMMA?
Aaagghh, no.
Since we're counting on the percentages, the near term likely going out worthless. Leaving a long naked call, yipes, sell that sucker and a few more and buy the next quarter. You'll be selling higher vol and buying lower. The higher goes to zero sooner, and the far out holds it's price better.
And, yes, gamma is speed of delta. Try a simulation with 20 short near term atm's and maybe 25 far out atm, see what you see from today to say, 20 days out. Move price up and down 10%. This is the easy way. Your sheets, provided by your broker should have all this in nice chart form for you to visualize.
Don
You lost me there.
Just buying back and selling the first front month, sold options. Leaving the third month alone. Which are long calls. Not running to expiration, but trying to catch the fluctuations on the first month.
Just buying back and selling the first front month, sold options. Leaving the third month alone. Which are long calls. Not running to expiration, but trying to catch the fluctuations on the first month.