Need help contructing a position

[robert111]

Hi, is there a way to create a position that acts like being long 100 shares, but for only 10 points in either direction, then stops gaining or losing? I wanted options that are about a year out.

I know I can create a spread that does this at expiration by buying a call vertical, and selling a put vertical, but with 1 year options, if the price moves in the short term, there is little change in the spread value. I wanted something that has 100 delta in the short term, but at 1 year later has a capped gain or loss of 10 points. Is this possible with any method or trading product?

Thanks

 

[Jones75]

Hi, is there a way to create a position that acts like being long 100 shares, but for only 10 points in either direction, then stops gaining or losing? I wanted options that are about a year out.

I know I can create a spread that does this at expiration by buying a call vertical, and selling a put vertical, but with 1 year options, if the price moves in the short term, there is little change in the spread value. I wanted something that has 100 delta in the short term, but at 1 year later has a capped gain or loss of 10 points. Is this possible with any method or trading product?

Thanks

A 10 point gyration on a year out delta neutral spread? …The bid/ask spread alone is going to cripple the whole thing……IMO

 

[CyJackX]

Why not just go long 100 shares and collar it?

 

[tommcginnis]

Another (undoubtedly unhelpful) thought:
There are only 4 ways to do options -- a 2x2 square of long and short, against puts and calls.
Seriously. Anything beyond that theme is variation. (It's great music, but still...)

DRAW THE PROFIT/RISK GRAPHS for each, and then, like a jigsaw, put together what you wish to do.

DO NOT make this trade without knowing ahead of time *exactly* what happens, now, and later, should it go up, should it go down, should it camp out.

I don't mean to sound pedantic, but ...... your question is a mite scary. Like, "If I go out playing in traffic, but look to my left the whole time, will I be okay?" Sure, kid; knock yourself out.

 

[Robert Morse]

Hi, is there a way to create a position that acts like being long 100 shares, but for only 10 points in either direction, then stops gaining or losing? I wanted options that are about a year out.

I know I can create a spread that does this at expiration by buying a call vertical, and selling a put vertical, but with 1 year options, if the price moves in the short term, there is little change in the spread value. I wanted something that has 100 delta in the short term, but at 1 year later has a capped gain or loss of 10 points. Is this possible with any method or trading product?

Thanks

Not with listed options. What would come close is that 10 point spread going out 1 year, but buying more of them. eg, if the calls spread has a 50 delta, buy twice as many. That way if you want a delta of 100 shares, buy 2 spreads.