Sharing+Discuss Option Trades/Strategies

Quote from travelboysteve:

You are right Atticus.
I have no business receiving $8.20 for a stock I paid $7.10 for.
I will immediately buy back the options, sell my stock, close out my accounts, beat my wife, kick the dog, and then go back pan handling in the streets,....
Now go watch your positions, or tell others what you think they should do with THEIR money,...you self righteous prick.
Your "street thinking" is very obvious,...
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My "being right" was never in question. I don't get a prize for correcting 2nd grade maths. I corrected your error so you'll not repeat the same mistake, but your indignation prevents admitting your mistake. You stated you earn 45% on the position. You believe your cost basis was 3.90. You're back-peddling and fucking it further sideways.

Self-righteousness has nothing to do with it. It's simple arithmetic.
 
Quote from travelboysteve:

You are right Atticus.
I have no business receiving $8.20 for a stock I paid $7.10 for.
I will immediately buy back the options, sell my stock, close out my accounts, beat my wife, kick the dog, and then go back pan handling in the streets,....
More...

You have not recieved 8.20 for the stock? You own the stock at 7.10 and at best case you will keep 1.10 for the option. Thats best case, you still have risk.
 
Atticus,
I removed my malicious comment, it was inappropriate. I apologize. My bad.
I realize we are both right.
I agree with your assessment, which is truly accurate at 15.4%, 1.1 / 7.1.
I was looking at the overall trade entry cost including call sale, and then the return of the call.
This particular trade I admit, for me is not my norm,....it is far lower in price, (stock) than I usually write calls against.
So, I am viewing this a little differently.
The bottom line for me is to have this called out at $5.
The extreme price of the call itself creates this position for me.
I paid $7.10 yes, and immediately receive $3.20 for the call, so my investment amount is $3.90.
I am breaking up the cost basis, I know this.
I am looking to have this called right away at the $5 level.
again, I appreciate your input,...
 
Quote from RobtF:

Perhaps more inexplicable than SVNT, is TOL. PM, let's calculate your return on a spread with expiry in Sept. (you couldn't find the stikes you desired in July???) .30 credit on a $1,500 spread for 106 days ($7 comm) is 5.4% per month on a housing stock thru the summer (to each his own). BTW, Black Scholes using a "100 day hv" (80) comes back with a theoretical probability of profit of 11%. You've lowered your standards.
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I have no idea how you calculated you math.
My ROI comes to about 25%... excluding commission.
My probability of profit will probably be in the area of 76 - 78%,.... depending on when the trade takes place.
I'm assuming the stock drops to the $17.50 area, and gets initiated in the next week or two.

Putz Master
 
What’s your plan if the stock opens at 2 or 3 bucks the day after the FDA announcement? The only reason you recieved that high a premium and the reason the IV is so high is becasue of the announcement.
 
put purchase on the 15th,
or allow it to rise, while writing options against it,...I think I'll have to see what happens really.
I simply couldn't believe the premium.
You are right, it could tank to $2 on the 16th, but could also rally back up,....only time will tell.
I'll post the results when that time comes.
BTW, It was also suggested to me to NOT purchase the June 1425 NDX @ $38.10 about 2 weeks ago,...

.NDTFI NDX JUN 1425 Call 75.60 76.50 BTO 10 Limit 38.10 DAY ISE 38.10 5/20/2009 10:01:16 AM 5/20/2009 10:01:15 AM

Current price

.NDTFI 77.62 +13.35 76.00 77.00 39 2,421 Trade
 
The NDX post is irrelivant since its nothing more than a post after the markets already moved.

I asked if you had a plan or considered what would happen if the FDA rejects SVNT and the stock tanks, being that you never even indicated you knew why the premiums were so high in that stock I imagine you are not well versed with how these tend to play out.
 
I replied with my post,..."put purchase on the 15th"..I did my own research, I am using my money,..if you don't like the position,..don't trade it,....
I don't like to divulge my entire view or strategy, that would be subject to even further opinion and discourse, of which, is counter productive to this thread.
it's been trading around $5 since the tank of March, and much higher prior to that,...I play the patience game,.....Slow and steady wins the race,.....
I like this trade, if you or thers don't, fine,...the 19th will reveal itself,...and we'll all see. Who knows, right?
Maybe try to be open to new ideas and view points as I am,....that's how we all learn, have fun and make a few sheckles along the way,....
 
Quote from travelboysteve:

Atticus,
I removed my malicious comment, it was inappropriate. I apologize. My bad.
I realize we are both right.
I agree with your assessment, which is truly accurate at 15.4%, 1.1 / 7.1.
I was looking at the overall trade entry cost including call sale, and then the return of the call.
This particular trade I admit, for me is not my norm,....it is far lower in price, (stock) than I usually write calls against.
So, I am viewing this a little differently.
The bottom line for me is to have this called out at $5.
The extreme price of the call itself creates this position for me.
I paid $7.10 yes, and immediately receive $3.20 for the call, so my investment amount is $3.90.
I am breaking up the cost basis, I know this.
I am looking to have this called right away at the $5 level.
again, I appreciate your input,...
More...

Well, we can't both be right. Your cost-basis is not $3.90. Any more so than someone buying GOOG at 440, selling a GOOG 100 call at 340.01, and stating their cost basis on their GOOG covered-call position is $99.99.

I can assure you that you're in the minority in assigning some significance to the $3.90 number. It's meaningless.

You cannot earn more than 1.10, period. So, your cost-basis is $6.00, plus commissions. It's not open to interpretation.
 
Quote from travelboysteve:

I replied with my post,..."put purchase on the 15th"..I did my own research, I am using my money,..if you don't like the position,..don't trade it,....
I don't like to divulge my entire view or strategy, that would be subject to even further opinion and discourse, of which, is counter productive to this thread.
it's been trading around $5 since the tank of March, and much higher prior to that,...I play the patience game,.....Slow and steady wins the race,.....
I like this trade, if you or thers don't, fine,...the 19th will reveal itself,...and we'll all see. Who knows, right?
Maybe try to be open to new ideas and view points as I am,....that's how we all learn, have fun and make a few sheckles along the way,....
More...

So you plan is to buy a put prior to the news even though at such time the IV in the options will be at its absolute peak and you'll pay top dollar for that put which would most likely cost the better part if not all or more than the 1.10 you collected on the call?

There are always things to learn. I don’t trade simple individual positions nor do I just do covered calls on a stock with high premiums. I don’t trade a stocks direction nor would I ever use long options to leverage a directional bet in the market. I have in fact learned some interesting things from a couple of posters but mainly I enjoy the questions others pose here and answering them accurately.
 
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