http://www.numa.com/derivs/ref/os-guide/os-0.htm
Numa has a decent basic exposition on-line.
Peace and gtty,
Lar
Numa has a decent basic exposition on-line.
Peace and gtty,
Lar
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Options Spreads
- Thread starter youngtrader
- Start date
quote from MTE
The only reason Aussie options have 0.5 increments is because the stock prices are so much lower.
You find it difficult to get $1 premium on a $5 spread!? This is nonsense. The premium depends on a lot of things, as you may be aware, so unless you outline specific spreads or conditions you are looking at this is not a valid reason! Option pricing is the same wherever you look!
I agree with you MTE... the ASX also does have 'expensive' stocks like RIO, NAB, CBA, BHP etc. > $30 and you get get $0.50 to $1.00 spreads on them.
I think if you do theoretical options price of spreads its better returns to do 5 x $0.50 spread than 1 x $2.50 given the same, volatility, share price, i/r, time and sold put strike price... (obviously the bought positions will be different strike) - maybe i'll check this out later got to go out now... something to think about
ASX are US style options except index options
It works for me, i'm sure there's a reason for it... you don't need to be a guru to write options and i don't confess to be a guru. I'm just learning as I go along.
Happy options expiry in the US for the coming Friday!
Quote from lar:
http://www.numa.com/derivs/ref/os-guide/os-0.htm
Numa has a decent basic exposition on-line.
Peace and gtty,
Lar
Remember, this site does a great job at many of the basics of option trading but it is not comprehensive by any means.
If I remember right, they do not discuss some important and basic things like:
*The accelerating tendencies of Time Value Decay near Expiry Day.
*I don't think they give Volatility realitites adaquate attention
*I think they don't pay enough attention the "The Greeks" as a way to quantify and qualify risk/reward issues inherent in trading options. I would also put some exposure to the million dollar BS method of option valuation as needed as well.
Natenburg and McMillian have books that can fill in those gaps.
They'll give you adaquate input for intermediate level understanding. If you're a quant, that's a whole 'nother story. If you gain an intermediate level of insight you can then decide if you should pursue further understading or not. At least at the intermediate level you can have enough under your belt to make a somewhat informed decision.
I hope this helps. All fwiw.
Peace and gtty.
Lar