Sharing+Discuss Option Trades/Strategies

Quote from Putz Master:

What is 500bps?
Is there another sight you can link me to for an improved probability calculator?
I can't download programs, as I use a webtv.

Gotta go. Read you later
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Oh boy. There is nothing wrong with the calculator. Your inputs are shit. You're operating heavy machinery while drunk and blind. Not a good combination.

Use .64% for interest rate. The default was set to 4.00%
Use 33% for implied volatility. The calculator was pricing 28% vols.

You underestimated both inputs which led to a faulty estimation of prob of profit. GIGO.

You're using webtv?
 
Quote from atticus:

You underestimated both inputs which led to a faulty estimation of prob of profit. GIGO.

You're using webtv?
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Over on STIR, under on IV.
 
Quote from atticus:


Use .64% for interest rate. The default was set to 4.00%
Use 33% for implied volatility. The calculator was pricing 28% vols.
You underestimated both inputs which led to a faulty estimation of prob of profit. GIGO.

You're using webtv?
More...

They automatically adjust the IV settings to the stock I select. It changes with each stock. So I don't understand why they used 28% for IV.
Even adjusting for interest rates, seems like they are using estimates or different variables of average # of days, yesterdays close price, ect... to come up with the 28%.
I'll be curious to see what IV figure they come up with for the next stock I initate a trade on.
It's their own system, so I don't know how they are calculating.

Yes I own a webtv. I've been waiting for it to die, but it refuses to. I'll have a computer before the year ends. Been looking at HP.
I can't imagine the quality and quantity of porn I'm missing out on <g>. Hope it doesn't cut into my stock research time..... much.
.:)

Putz Master
 
Quote from Putz Master:

They automatically adjust the IV settings to the stock I select. It changes with each stock. So I don't understand why they used 28% for IV.
Even adjusting for interest rates, seems like they are using estimates or different variables of average # of days, yesterdays close price, ect... to come up with the 28%.
I'll be curious to see what IV figure they come up with for the next stock I initate a trade on.
It's their own system, so I don't know how they are calculating.

Yes I own a webtv. I've been waiting for it to die, but it refuses to. I'll have a computer before the year ends. Been looking at HP.
I can't imagine the quality and quantity of porn I'm missing out on <g>. Hope it doesn't cut into my stock research time..... much.
.:)

Putz Master
More...

You cannot solve for IV from stat-vol and they're not using GARCH. They're likely downloading the ATM straddle prem and using stale/EOD data.

You decrease touch/expiration probability as you decrease or underestimate volatility. As you increase the STIR you skew the distribution upwards. Both errors [low IV, high rates] reduce the down & out touch and expiration probability which increase the prob of profit on your short gamma/vega position.
 
Quote from atticus:

You cannot solve for IV from stat-vol and they're not using GARCH. They're likely downloading the ATM straddle prem and using stale/EOD data.

You decrease touch/expiration probability as you decrease or underestimate volatility. As you increase the STIR you skew the distribution upwards. Both errors [low IV, high rates] reduce the down & out touch and expiration probability which increase the prob of profit on your short gamma/vega position.
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Good info. I wouldn't have known I was using faulty data if you hadn't pointed it out.
 
Quote from optioncoach:

As long as we are sharing useless information, I am having chicken for lunch.
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Hello OC,
Nice seeing you again.

It's the same 3-4 posters going round and round. What a waste of time. I'm outta here...
 
Quote from nlslax:

Hello OC,
Nice seeing you again.

It's the same 3-4 posters going round and round. What a waste of time. I'm outta here...
More...

Your right and I understand its not all that good a thread. My goal was to make sure no unsuspecting reader made the mistake of believing some of the bad info passed and had an idea of the original posters track record.
 
Created a putz spread on $22.50 / $20 SUN for August.

Bought the $20 puts.
Sold the $22.50 puts.
Credit of $0.44

Probability of break even................. 78%
B/E otm safety cushion ........19%
R/R ratio............. 4.7:1


Putz Master
 
This thread was getting a bit long and OFF TOPIC (thanks xflat2186).
Thus I'm initiating a new thread for its continuance.
I'm hopeful there will be fewer off topic board disrupting events there, wasting readers time.

Putz Master
 
You have many more posts than I off topic here. Most of your posts are simply the same huff and fluff about strike selection or how everyone is angry.

You have started plenty of threads since coming here and hundreds on other boards they all end the same way.
Feel free to start yet another identical thread.


Have a great day!:D
 
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