My option trades

Sinclair's ("filthy" on the forums) books are good. You can buy the Kindle edition and start reading today on your PC:

http://www.amazon.com/Option-Tradin...-Techniques/dp/0470497106/ref=ntt_at_ep_dpt_2

Along the way, you'll gain an in-depth understanding of:

The various option strategies that can be implemented, from puts and calls to strangles, straddles, and butterflies

How to measure and forecast realized volatility, the nature and behavior of implied volatility, and what it takes to successfully trade the two

The concept of expected value, the general idea of hedging, and the importance of trade sizing

The strategies behind market making

The essential aspects of risk management in option trading
 
Quote from atticus:

Sinclair's ("filthy" on the forums) books are good. You can buy the Kindle edition and start reading today on your PC:

http://www.amazon.com/Option-Tradin...-Techniques/dp/0470497106/ref=ntt_at_ep_dpt_2
More...

I've read one of his books- volatility trading. Kinda cool that he is active in these forums also.

Atticus, question for you: Would you rather sell a straddle or buy a butterfly during high volatility going into a binary event (say an earnings or a FDA approval for instance?).

I really like flys. Easy to set up (especially if you're fooling around with TOS- really helps you visualize risk). Selling a straddle is still unnerving for me but I see the profits in hindsight. Butterflies have given me headaches once in a while but I like that risk is not unlimited.

To Falconview, not sure what EliteTrader policy is for saying this, but if you'd like, I could let you borrow Natenberg's book if you'd like to read it...

PM me for instructions...
 
Thanks guys. You fellas are really kind and generous with your time and expertise. Your offer Atticus is wonderful, but for the moment I´m going to have to postpone. I´m nibbling away each weekend at this stuff. But got to absorb it in small chunks, slowly. You use big words, you must be educated? ( grin )- heuristically- I´m not much good for anything over six letter words ( grin ) And no I don´t have a dictionary. At least not one in English. Language learning types yes. How´s your Mandarin? ( grin )

I´m retired outside the USA in the boondocks of Central American Caribbean coast. Things like getting books is not so easy. I will ask my Library of Congress friend to buy the book for me, Option Trading, strategies and techniques by Sinclair. I have an arrangement to reimburse him with his account here. He has a vacation/retirement home he is expanding here for his future.

Not sure when it would arrive from Washington, but in one of the parcels he sends down every once in a while, it should arrive eventually. I´ve heard of Kindle books, but don´t have credit cards, a personal decision for most of my life.

My mailing address is the nearest country small town. Falconview, Box 276, San Ignacio, Belize, Central America. I check for mail sometimes once a week, if I´m expecting something.

babutime thankyou! I like having friends, so there are some great guys on this forum. If you can sleep in a dormitory, got extra bunk beds and extra kitchens. Used to run a HOSTEL one time.
 
Okay! This is what I´m trying to learn this weekend.
Made notes after reading online.

TRADING GREEKS AROUND A CORE TRADE

1) Start off with a core trade ( buying 10 contracts )
2 All Greek calculations start ATM.
3) Greek trading system does not use charts and indicators
4) Delta, Gamma, Theta, Vega
5) ATM is the neutral balance point
6) -OTM options only have premium value based on volatility called Extrinsic value
- ITM contain 2 pemium values
-intrinisic from price movement positively
-extrinsic from premium caused by volatility
7) supply and demand, cause premiums to expand and shrink either direction of market action up or down
8) ATM options have highest Vega number
Vega reduces as it moves away from ATM
9) ATM positions are highest values for gamma and vega
10) Premium value increases or shrinks with V
11) You profit in simplest trading with buying for more volatility, or selling volatility
12) If Vega starts reducing it is moving away from neutral.
Probably expanding premium
13) The SELLING of options is to get your vega back to neutral. This is profit.
14) You adjust the trade with either selling off profitable vega ( lower numbers) balancing at ATM neutral.
15) Supply and demand in the auction place ( volume ) alter gamma and vega.
16) Theta tells you how much your time decay is per day
17) Delta tells you the direction of index movement
18) Vega tells you how much premium volatility is increasing, or shrinking.
19) Trade by taking your core and do adjusting to ATM by selling excess.

Just my brief notes this quiet Sunday weekend, to the sound of 1950´s music selections coming from my computer. YEAH MON!
 
Quote from falconview:

Atticus

I don´t have a credit card. I pay by cheque. Would take a month thereabouts from here.
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Your daughter could have already mailed you a copy of Natenburg since the discussion of books had started. If would be at your PO Box next week. Instead now it will be May 1st at the earliest.

Anyway, my suggestion to learn options:
1. Learn what a call is and everything about it. How the greeks work with it, how pricing is done, and why it would be used.
2. Learn a put and it's relationship to a call.
3. Realize that every other structure is a linear combination of calls, puts, and stock.
4. Learn how other people apply options and why based on 1,2 and 3.

Trying to learn why Atticus trades the way he does or why Don trades the way he does is putting the cart before the horse. Everyone has their own theories.

As a captain of a boat you probably had your way of doing things and other captains had their way of doing things. It would be pointless for me to learn how you ran your boat when I don't know what "starboard" is.
 
Quote from falconview:

Atticus

I don´t have a credit card. I pay by cheque. Would take a month thereabouts from here.
More...

I think you're running out of excuses. Amazon will take e-check. You enter the transit and account number and it clears as an ACH.
 
Quote from atticus:

I think you're running out of excuses. Amazon will take e-check. You enter the transit and account number and it clears as an ACH.
More...

Gotta say Atticus you're a Freakin joy to read. I have a pdf of the 1994 edition of natnebergs book. I would post it here not sure if the mods will allow it...
 
Quote from babutime:

Gotta say Atticus you're a Freakin joy to read. I have a pdf of the 1994 edition of natnebergs book. I would post it here not sure if the mods will allow it...
More...

Please PM Falcon for his email and send that sucker! :)
 
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