TRADE ALERT - Buy RIMM Oct 2008 105.00 calls
- Thread starter forex-forex
- Start date
Both Phil and dagnyt know a lot about options, I remember them from the Yahoo boards.
Looks to me that the "Paper Airplane" trade is similar to "heads and shoulders". I have never heard the term "Paper Airplane" but can see how it gets its name.
I am also a customer of Starbucks. I go at least twice a day for a "Tall Dark Coffee".
I just read this thread. I wish I read it before earnings. A classic fade, given all the positives at start of thread. I will keep an eye on forex-forex' calls next time.
Yes please do.
I have some real kick ass trades ready and will keep ET informed.
I have constructed something similar to this and the biggest problem I remember is that it is significantly long vega and the risk graph is not taking into account the drop in vols in the front month or even the back months (I assume this trade is calendarized somehow).
But it wasn't. This coin had a very wide edge, meaning it had a decent chance of landing on its edge.
Think of a roulette wheel with 10 green 'zeros.'
Because IV was so high, merely being correct on market direction was insufficient to guarantee a profit. When forex-forex bought OTM calls at that super pumped implied volatility, his chances of success were much worse than the standard red/black scenario.
His wheel had all those green slots. That means there were scenarios in which the stock could rise and the calls decline in value.
Mark
Not sure who to thank, but I faded this RIMM tip. Thanks for the two grand.