Options Mentor

N

NRITV

Hello Option Gurus

I see there are some brilliant guys in this forum and I would appreciate if you can help me.

I trade E-Mini S&P 500 regularly and fairly successful. What I am looking for is for an experienced person who can help make the Option trades(back spreads etc) based on my Futures strategy I have.

I am new to this so any help is greatly appreciated.

I will give you a theoretical example: Assuming the E-Mini S&P 500 goes UP , say till sept second week. How could I leverage my account with options trading. What kind of Option trades do you suggest.

I dont mind compensating for your time.

Thanks
 
NRITV said:
How could I leverage my account with options trading. What kind of Option trades do you suggest.
More...

If you think the market will go up, then buy a bunch of call options.
and if you think the market will go down, buy a bunch of put options.

and repeat and repeat...:confused:
if you're right, you get rich.
 
I think there are quite a few variables that make answering your question a little complicated. For example, if you "100% know" the market will go up the position you would want to construct would be very different than if you "50% know" the market will go up.

In the former case, a negative theta, long gamma position would be better (buying options). If you're less sure, some sort of positive theta, short gamma trade would be preferable. Specifically, I'm thinking about an out of the money Broken wing Butterfly or even a directional Butterfly.

Options give you a wide range of choices for constructing the type of position that you want to trade and there are a ton of options (pun only partially intended). Shoot an email to info at thetatrend dot com if you'd like to talk more.
 
lawrence-lugar said:
If you think the market will go up, then buy a bunch of call options.
and if you think the market will go down, buy a bunch of put options.

and repeat and repeat...:confused:
if you're right, you get rich.
More...

It's not that simple with a VIX at 35-40...Calls start to come in even as the market rallies significantly...
 
der_kommissar said:
It's not that simple with a VIX at 35-40...Calls start to come in even as the market rallies significantly...
More...

Thanks for your response. This is what I am looking for.

Assuming(just an example): If S&P500 goes up till sept10 and the volatility drops, what kind of options strategy do you suggest?

Thanks again!
 
NRITV said:
2020. Volatility will go down.
More...

We had a big drop in volatility today. I think a long position involving options would best be expressed simply with a long call. Too dangerous for a put sale.

I would rather be long the buy the dip dynamic with a stop loss (ie long call) than have an even worse volatility explosion (along with a short put) in case there is a resumption of a bear market.

Your idea of a backspread ( as a hedge) would have less risk now. But synthetically, it is like you have 1 long call and 1 short put spread. KISS

I think this market meanders up from here. But, I can't stomach a short put. If you think about it, periods of heightened volatility is really when you want to maintain cash and have measured participation.
 
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Im still learning with options so had to keep it simple and wanted to take a long position without being knocked out of the position by the volatility (had enough of that the last few days!)

So this morning I bought reasonably deep ITM calls and had orders to sell same number of OTM calls (with similar time value) after the rally. It was on euro markets and the sell orders were not filled as the rally faded at the US open. Maybe a good thing since the US had a strong day and to get the same time value I can sell at a higher strike tomorrow. Makes sense or any better ideas ?
 
With the sharp reversals in the last three days, we are really playing with coin flips here. Shanghai has recently opened up 2.3% with not much of a reaction from the ES. Unfortunately, I have already been enticed to buy some Sep30 2005 calls at 20 IV earlier.

I wouldn't sweat the Theta/Vega exposure on your deep ITM. It is probably small in proportion to the value of your contracts. Delta is a bigger worry. Making it a vertical won't take much of the downside exposure away since it is deep ITM and your proposed sales are OTM.
 
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