Opinions on Using Fixed Profit Targets

[destriero]

Dest,

Apologies for sending through on this thread, but I do not seem to have sufficient posts to send PM.

What am I missing on the below -

Buy 100 shares of TUR at 19
Sell SEP 19 call for 3.30
Buy SEP 18 put for 0.80

If TUR above 19 at expiry then I make $250
If TUR below 18 at expiry the I make $150
If TUR between 18-19 at expiry I make between $150-250

I'm sure I'm missing something...

The quotes don't seem correct. You would be buying the synthetic 18/19 call spread at a large credit. 100 shares from 19 + 18P at 0.80 = long synthetic 18C from 1.80. Then shorting the 19C for 3.30. You'd "own" the 18/19 call spread from a 2.50 credit. I am logging into my front-end now.

Edit: The 19C is 2.15x2.40 now. The 18P is 1.25x1.30. The 18/19C spread is 0.40x0.95 and the synthetic call spread (fenced shares) is 0.82 marketable.

 

[mjf61]

Hopefully this screenshot comes through

 

[SumZero]

That's wrong. Right now TUR is at 19.01 and this is what we see in interactive.

 

[SumZero]

what's the platform you posted ?

 

[mjf61]

what's the platform you posted ?

IB on my phone at 13.17 swiss time today

 

[destriero]

In any event--don't buy the shares if you're looking to trade the long stock/long put/short call. Just buy the 18/19 call spread as it's equivalent.

 

[mjf61]

In any event--don't buy the shares if you're looking to trade the long stock/long put/short call. Just buy the 18/19 call spread as it's equivalent.

Nice one, thanks

 

[Mifar]

I think you need to use the targetted price (tp) while trading on the money markets. It gives you an ease to spend some time for other purposes as you cannot watch the market all the time. So, all the beginners are advised to use the target price. Thank you so much!

 

[speedo]

I don't know anything about options but I set targets on futures based on average MFE in my time frames. It keeps things simple and it works for me. You have to test various strategies and understand yourself to find something that works for you.

 

[tomorton]

Hello All,

What are your thoughts on predefined stop loss and profit targets or bracket orders?

My trading style with one contract has been to:

1. Enter the trade
2. Set a stop loss in a good location (preferably below some price action support or resistance)
3. Pick a profit target level (at some resistance level if long) and wait for price to break that level for more profits.

The problem I face sometimes is price comes to the level and retrace down (if long) and I lose some profits. It makes my decision making kind of challenging. Of course one contract is somewhat a challenge too.

Lately, I been thinking of just exit a certain profit. For example, aim for 20 ticks profit per trade using 20 tick stop loss. That means with a win rate greater then 50% I be profitable on the year. Obviously, I want a higher win rate then 50% (hopefully between 60% and 70%)

I appreciate your comments, opinions, or advice. Thank you.

I never set TP's, I always ignore chart resistance in uptrends and support in downtrends. I'm currently trialling SL's at 2 x ATR like @smallfil mentioned above (using ATR20 like the Turtles) and actually, I'm generally looking to pyramid where other traders might be taking profit - as long as the trend's still strong.