oldschool getting schooled
- Thread starter oldschool
- Start date
not the same strikes...go eat your turkey 
ok..what I meant was something like sell the 195/190 put for $1.90 and buy the 210/220 call for $2.45 ((X5contracts)...synthetic long? double edit..this is a bit more bullish than your fly...now I'm gonna eat my turkey...and drink with friends..Merry Christmas! Fattail will get the details of my goog trade tomorrow if I have time
ok..what I meant was something like sell the 195/190 put for $1.90 and buy the 210/220 call for $2.45 ((X5contracts)...synthetic long? double edit..this is a bit more bullish than your fly...now I'm gonna eat my turkey...and drink with friends..Merry Christmas! Fattail will get the details of my goog trade tomorrow if I have time
<i>"Time to do my part (research) and figure out wtf you guys just said."</i>
We all basically said the same things... with different choices. You gave the trade parameters, we offered specific choices to fit.
The bull-put credit spread works in your favor several ways. Lowers cost basis on stocks you wish to own regardless. That is different than a pure option play for direct profit only.
The bull-put credit spread places a credit (cash) in your account which stays there unless your stock(s) trade below the short put options sold. Then, you have several decisions to make. Close it for small loss, repair out (numerous choices) or let it get assigned and hold the stock for lower cost basis than outright purchase of stock at time credit spread was sold.
I used to write SPX credit spreads... that is a different approach than wanting to own stocks outright. If I were interested in buying stocks for investment purpose that did not pay a dividend, I would never buy them outright unless account parameters (IRA, no-margin, no option trading, etc) didn't permit.
If/when I return to the stock investing world, I would mostly write otm puts BELOW stock price and pocket the credit. Worst case scenario? Stock drops down thru my short put and I own it for less than outright buy. Best case scenario? Stock keeps moving sideways or higher, keep selling otm puts and rolling up credit = lowering eventual cost basis, if the stock is ever owned.
Key concept here is desire to hold the stock long-term as an investment.
*
Before you trade anything like this, you need to know all possible angles of any trade immediately if awakened from a dead sleep. Buy the book on option trading from CBOE. It was +/- $60 when I bought it years ago, many pages and extensive coverage of basics = intermediate option stuff explained in layman terms.
I had been trading options for several years prior to reading it and knew most (not all) of everything in there, but it was still worth many times the price to me.
Gotta go wrap presents with Holly... would much rather talk option trading here with you :eek:
Merry Christmas
We all basically said the same things... with different choices. You gave the trade parameters, we offered specific choices to fit.
The bull-put credit spread works in your favor several ways. Lowers cost basis on stocks you wish to own regardless. That is different than a pure option play for direct profit only.
The bull-put credit spread places a credit (cash) in your account which stays there unless your stock(s) trade below the short put options sold. Then, you have several decisions to make. Close it for small loss, repair out (numerous choices) or let it get assigned and hold the stock for lower cost basis than outright purchase of stock at time credit spread was sold.
I used to write SPX credit spreads... that is a different approach than wanting to own stocks outright. If I were interested in buying stocks for investment purpose that did not pay a dividend, I would never buy them outright unless account parameters (IRA, no-margin, no option trading, etc) didn't permit.
If/when I return to the stock investing world, I would mostly write otm puts BELOW stock price and pocket the credit. Worst case scenario? Stock drops down thru my short put and I own it for less than outright buy. Best case scenario? Stock keeps moving sideways or higher, keep selling otm puts and rolling up credit = lowering eventual cost basis, if the stock is ever owned.
Key concept here is desire to hold the stock long-term as an investment.
*
Before you trade anything like this, you need to know all possible angles of any trade immediately if awakened from a dead sleep. Buy the book on option trading from CBOE. It was +/- $60 when I bought it years ago, many pages and extensive coverage of basics = intermediate option stuff explained in layman terms.
I had been trading options for several years prior to reading it and knew most (not all) of everything in there, but it was still worth many times the price to me.
Gotta go wrap presents with Holly... would much rather talk option trading here with you :eek:
Merry Christmas
Another time, another place, I wouldn't be anywhere near a keyboard on Xmas Eve.
As fate would have it, this year, here I am.
So did a quick drive by through some of the basic options websites to understand some of what was said here, and this what I got so far. Damn, I hate being stupid.
Sell a bear spread:
Might own the stock worst case (not good, this acct is only for options - $30k, so I couldn't afford to own some stocks if I get assigned. What I meant by net long was through options only, should have mentioned that.)
Buy a call spread:
As per atticus, vol is well bid, so he recd's the fly...is that right? Is a fly one of the better plays when vol is well bid? But if vol is well bid right now, wouldn't the ATM's be most fairly priced as opposed to the OTM's? Why is it better to sell the ATM's instead of the OTM's? Me sooo f'innnnnnnng stupid!!! btw...MacWorld ends on the 18th, Jan options exp on the 18th...was this always the case? what a potential clusterfuck.
Buy Butterfly:
180/200/220 fly vs. 190/210/220 fly
I have to be right on the projected price move AND time of move. Max profit if UL is at or near middle strike. So is a fly basically saying I think AAPL will close at or near 200 but still between 180-230 on Jan exp? On atticus' 180/200/220 fly, I would be profitable less comms, bet 183.51 and 216.49...is this correct?
damn...I so stupiiiiiiiiiiid!
As fate would have it, this year, here I am.
So did a quick drive by through some of the basic options websites to understand some of what was said here, and this what I got so far. Damn, I hate being stupid.
Sell a bear spread:
Might own the stock worst case (not good, this acct is only for options - $30k, so I couldn't afford to own some stocks if I get assigned. What I meant by net long was through options only, should have mentioned that.)
Buy a call spread:
As per atticus, vol is well bid, so he recd's the fly...is that right? Is a fly one of the better plays when vol is well bid? But if vol is well bid right now, wouldn't the ATM's be most fairly priced as opposed to the OTM's? Why is it better to sell the ATM's instead of the OTM's? Me sooo f'innnnnnnng stupid!!!
btw...MacWorld ends on the 18th, Jan options exp on the 18th...was this always the case? what a potential clusterfuck.Buy Butterfly:
180/200/220 fly vs. 190/210/220 fly
I have to be right on the projected price move AND time of move. Max profit if UL is at or near middle strike. So is a fly basically saying I think AAPL will close at or near 200 but still between 180-230 on Jan exp? On atticus' 180/200/220 fly, I would be profitable less comms, bet 183.51 and 216.49...is this correct?
damn...I so stupiiiiiiiiiiid!
I was going to write this up as a separate post, but what the hell.
I've already dug myself an idiot hole with this post, so I'll just continue here.
AAPL: CP: 198.80
12/21/2007 BUY +1 AAPL 100 Apr 08 190 CALL $22.50 CP: $26.65
12/24/2007 SELL -1 AAPL 100 Jan 08 220 CALL $2.48 CP: $2.92
AGU: CP: 70.27
12/21/2007 BUY +1 AGU 100 Apr 08 65 CALL $8.00 CP:$11.45
12/21/2007 BUY +1 AGU 100 Apr 08 65 CALL $8.00 CP:$11.45
12/24/2007 SELL -2 AGU 100 Jan 08 75 CALL $1.95 CP:$2.70
FLS: CP: 99.20
12/21/2007 BUY +1 FLS 100 Apr 08 95 CALL $11.60 CP:$12.40
CP: Closing Price
On 12/21, I bought 4 calls. 1 appl, 2 agu, 1 fls.
On 12/24, I "hope" I locked in some profits by selling some.
I am posting this so that I could start fresh, sort of. I was going to put on the above positions X2, but the trader told me the size is perfect given how retarded I am for even putting on a options position. I got lucky and the trade's going my way, but had no clue wtf I needed to do. I was feeling like the holidays would kill the vol a bit, so I was told by TOS that I could consider selling some front month OTM's.
In retrospect, maybe they were just being the brokers that they are? "Trade more you old fool, we love commissions". Maybe I would have been better off doing nothing? Is APR far out enough where a little dip in vol or price wouldn't have hurt me so much? Maybe some of you are right. Maybe I'm not cut out for this shit. It's easy lifting offers and hitting bids when trading the underlying whatever...
BUT I WANT TO TRADE OPTIONS DAMN IT! So we go forward!
I know this changes everything. Many of you will probably say, "well, why the hell didn't you just tell us your positions before?". Sorry, I had a lot of things on my mind lately, just wasn't thinking.
Anyway, now that the cat's out of the bag, and also given what was already said...... HELLLLLLLLLLLLLLP! What, if anything should I do to adjust my positions so that they fall in line with my parameters?
I promise, no more renegade trades before consulting the oracles.
Now you guys see why I was going to pay someone?
I do appreciate the help though, never forget that please.
I've already dug myself an idiot hole with this post, so I'll just continue here.
AAPL: CP: 198.80
12/21/2007 BUY +1 AAPL 100 Apr 08 190 CALL $22.50 CP: $26.65
12/24/2007 SELL -1 AAPL 100 Jan 08 220 CALL $2.48 CP: $2.92
AGU: CP: 70.27
12/21/2007 BUY +1 AGU 100 Apr 08 65 CALL $8.00 CP:$11.45
12/21/2007 BUY +1 AGU 100 Apr 08 65 CALL $8.00 CP:$11.45
12/24/2007 SELL -2 AGU 100 Jan 08 75 CALL $1.95 CP:$2.70
FLS: CP: 99.20
12/21/2007 BUY +1 FLS 100 Apr 08 95 CALL $11.60 CP:$12.40
CP: Closing Price
On 12/21, I bought 4 calls. 1 appl, 2 agu, 1 fls.
On 12/24, I "hope" I locked in some profits by selling some.
I am posting this so that I could start fresh, sort of. I was going to put on the above positions X2, but the trader told me the size is perfect given how retarded I am for even putting on a options position. I got lucky and the trade's going my way, but had no clue wtf I needed to do. I was feeling like the holidays would kill the vol a bit, so I was told by TOS that I could consider selling some front month OTM's.
In retrospect, maybe they were just being the brokers that they are? "Trade more you old fool, we love commissions". Maybe I would have been better off doing nothing? Is APR far out enough where a little dip in vol or price wouldn't have hurt me so much? Maybe some of you are right. Maybe I'm not cut out for this shit. It's easy lifting offers and hitting bids when trading the underlying whatever...
BUT I WANT TO TRADE OPTIONS DAMN IT! So we go forward!
I know this changes everything. Many of you will probably say, "well, why the hell didn't you just tell us your positions before?". Sorry, I had a lot of things on my mind lately, just wasn't thinking.
Anyway, now that the cat's out of the bag, and also given what was already said...... HELLLLLLLLLLLLLLP! What, if anything should I do to adjust my positions so that they fall in line with my parameters?
I promise, no more renegade trades before consulting the oracles.
Now you guys see why I was going to pay someone?
I do appreciate the help though, never forget that please.
I use TOS desktop and they have this beautiful interface for analysing options. Risk, p&l and more....what a waste on my pc.
How the hell do I learn this options stuff when my brain just doesn't seem to work this way? Do I need to go to an options firm for a year or two? Should I just not donate and go back to what feels "right" for my brain? I hate trading.
How the hell do I learn this options stuff when my brain just doesn't seem to work this way? Do I need to go to an options firm for a year or two? Should I just not donate and go back to what feels "right" for my brain? I hate trading.
Speaking of Butterfly, here's one I hope you like:
http://it.youtube.com/watch?v=KVRhuQWS4tc
sorry, couldn't resist....
http://it.youtube.com/watch?v=KVRhuQWS4tc
sorry, couldn't resist....
Hi oldschool. There is basically nothing wrong with calendars however usually work better when vols are down and expected to go up and you go with a Put calendar. Calendars are difficult in that you want them to go your direction but not TOO much in your direction...tough to make money on and very commission intensive. Good to learn to trade them though.
Old thread on ET that tracked calendars in the 1st half of 2006 shows the good, bad and (really ugly) trades by novice option traders. Some pretty good info in it though.
http://elitetrader.com/vb/showthread.php?s=&threadid=58716
enjoy
Old thread on ET that tracked calendars in the 1st half of 2006 shows the good, bad and (really ugly) trades by novice option traders. Some pretty good info in it though.
http://elitetrader.com/vb/showthread.php?s=&threadid=58716
enjoy
