c'mon taggart. stop pointing out the obvious.
Options strategies with limited risk, unlimted profits potential, yet no time-decay?
- Thread starter crgarcia
- Start date
Hi Garcia
A Ratio'ed calendar spread could do the trick, as follows
Long Far Month out-the-money calls. (say 5 Contracts)
Short Near Month Nearer-to-the-moneycalls. (say 2 Contracts)
Play around with that. The ratio will depend on time to expiries and implied volatiliies etc.
With such stategies you can unwittingly be taking other views. You may be running theta neutral ( or even positive) in a static market, and your P/L through time at constant vols might look fine too, giving a profit over a broad range, but big drops in implied volatility could Cost.
The trick is to have a good management system showing P/L through time and Implied volatility changes. The best time to do such trades would be in low implied volatility environments. SO please don't do this trade now.
I have programmed many custom option management trading systems for 15 yrs now, run large options book for investment banks, traded small option stategies, and believe you me, there is nothing for free out there.
A Ratio'ed calendar spread could do the trick, as follows
Long Far Month out-the-money calls. (say 5 Contracts)
Short Near Month Nearer-to-the-moneycalls. (say 2 Contracts)
Play around with that. The ratio will depend on time to expiries and implied volatiliies etc.
With such stategies you can unwittingly be taking other views. You may be running theta neutral ( or even positive) in a static market, and your P/L through time at constant vols might look fine too, giving a profit over a broad range, but big drops in implied volatility could Cost.
The trick is to have a good management system showing P/L through time and Implied volatility changes. The best time to do such trades would be in low implied volatility environments. SO please don't do this trade now.
I have programmed many custom option management trading systems for 15 yrs now, run large options book for investment banks, traded small option stategies, and believe you me, there is nothing for free out there.
So, a spread is a limited profit strategy? Dawn, I'm always the last who got the news here...
I was kidding Mark ( there is a smiley, isn't).
I suggest more creativity in these markets. In a literal sense, there is no such thing as you are asking for.
In a thought out and extrapolated sense, I recommend you find the correlation of a broad index of equity stocks that have probably between $2.00 - $10.00 as their trading price, find their correlation to ag prices (probably +.5 is easy to find), and buy these stocks holding in perpetuity. They are priced as cheap as an option, and a broad recovery of the markets will likely enable these stocks with questionable (almost zero) equity positions to recover nicely with limited downside.
Other than that, buy whatever you are looking for outright with low leverage, and you are likely to do as well. There is no magic repository of zero risk that exists in these markets, at least for long.
Maybe another outside the box idea is some actual liquidated farmland. That is definitely a limited risk option on the agriculture market, as I see it. Your carrying cost can be equated with cost of money and property tax, with upside significant and most likely correlated.
In a thought out and extrapolated sense, I recommend you find the correlation of a broad index of equity stocks that have probably between $2.00 - $10.00 as their trading price, find their correlation to ag prices (probably +.5 is easy to find), and buy these stocks holding in perpetuity. They are priced as cheap as an option, and a broad recovery of the markets will likely enable these stocks with questionable (almost zero) equity positions to recover nicely with limited downside.
Other than that, buy whatever you are looking for outright with low leverage, and you are likely to do as well. There is no magic repository of zero risk that exists in these markets, at least for long.
Maybe another outside the box idea is some actual liquidated farmland. That is definitely a limited risk option on the agriculture market, as I see it. Your carrying cost can be equated with cost of money and property tax, with upside significant and most likely correlated.
THERE IS NO FREE LUNCH !!!
YOU HAVE TO PAY TO PLAY
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EliteTrader
The mods edited my post so it is now meaningless. Perhaps total deletion would have been better.
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