How ca you get a motherboard in 10 days, but not a book?
Anyway, last time I post about this. Good luck in your endeavors.
Trading Long Straddles
- Thread starter falconview
- Start date
How ca you get a motherboard in 10 days, but not a book?
Anyway, last time I post about this. Good luck in your endeavors.
The motherboard was in-country, in a different small town district capital. Phoning around found it. Getting it delivered and paying for it were the complications. Nothing in computer parts available were in our local twin towns district capital. ( about 30,000 people )
For example, tomorrow Monday, have to make a journey in my pickup truck to the capital of the country called BELMOPAN. It is 25 miles away. The journey takes about 1 1/2 hours on a windy road. We don't measure distances by miles, but by time required to travel it. Got an appointment at the US Embassy Fortress in the capital, at 1 p.m. to renew my US passport, which expires in two weeks. Will leave home about 10.30 a.m. to 11 a.m. Expect to get back about 4 p.m. local time. Will have to put in a sell order in TOS before I leave for 3 options, if the opening Monday E Mini is encouraging.
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Been thinking about the JR BROWN straddle, using a long option and a bear debit spread.
I'm gonna think out loud here, because my knowledge of debit spreads is fairly zero. From my memory a debit spread is when you pay more for the bought side, than the sold side.
So you put on a Long Straddle and sit and wait for market movement. At some point ( I have a long straddle I'm sitting on for a week now doing nothing. Not moving enough)
At any rate, if the market starts to move strongly in one direction, you would sell the cheaper premium strike on the losing side. To make the losing bought option, a debit spread.
Now I'm trading QQQ. The QQQ premiums normally move .60 cents between strikes. Weekly ATR is around 1.20 strikes to 1.5 strikes in a higher VIX environment. My price targets are usually .80 cents and 1.15 cents to sell for a move. There is a .10 cent commission for each side round turn. I can on the moving side either clear net profit, .70 cents, or $1.05, if I'm wanting to wait for the longer move. At some point if I take the losing premium and sell the cheaper strike, making a debit spread, that should lessen the odds of the price paid for the premium overall on the losing side. How much I don't know, but something?
The losing side only has to swing one strike, versus the preferred side you thought would run further, before reaching the cap on a debit spread. Would run 1.5 strikes. There is .60 cents to play with here, of which .20 cents would cover the spread round turn commissions. So I need .40 cents or as close to it as I can get, when selling the cheaper premium to turn the expected losing long option into a debit spread. Market movement fluctuates, so I will either make a net of $1.05 on my chosen running side, less the cost of the debit spread. I see the insurance aspects of this trade, you will win either way, if the market moves in one week, 1 strike on the debit spread side, a small amount I expect? On the side you expect to run, you would make less, eventually if you wait. And or be left over with a long option.
JR Brown says you can leg out of the side that did not work. Not sure how you would do that? Wait for market fluctuation I guess?
Just thinking out loud here. Talking to myself.
For example, tomorrow Monday, have to make a journey in my pickup truck to the capital of the country called BELMOPAN. It is 25 miles away. The journey takes about 1 1/2 hours on a windy road. We don't measure distances by miles, but by time required to travel it. Got an appointment at the US Embassy Fortress in the capital, at 1 p.m. to renew my US passport, which expires in two weeks. Will leave home about 10.30 a.m. to 11 a.m. Expect to get back about 4 p.m. local time. Will have to put in a sell order in TOS before I leave for 3 options, if the opening Monday E Mini is encouraging.
______________________________
Been thinking about the JR BROWN straddle, using a long option and a bear debit spread.
I'm gonna think out loud here, because my knowledge of debit spreads is fairly zero. From my memory a debit spread is when you pay more for the bought side, than the sold side.
So you put on a Long Straddle and sit and wait for market movement. At some point ( I have a long straddle I'm sitting on for a week now doing nothing. Not moving enough)
At any rate, if the market starts to move strongly in one direction, you would sell the cheaper premium strike on the losing side. To make the losing bought option, a debit spread.
Now I'm trading QQQ. The QQQ premiums normally move .60 cents between strikes. Weekly ATR is around 1.20 strikes to 1.5 strikes in a higher VIX environment. My price targets are usually .80 cents and 1.15 cents to sell for a move. There is a .10 cent commission for each side round turn. I can on the moving side either clear net profit, .70 cents, or $1.05, if I'm wanting to wait for the longer move. At some point if I take the losing premium and sell the cheaper strike, making a debit spread, that should lessen the odds of the price paid for the premium overall on the losing side. How much I don't know, but something?
The losing side only has to swing one strike, versus the preferred side you thought would run further, before reaching the cap on a debit spread. Would run 1.5 strikes. There is .60 cents to play with here, of which .20 cents would cover the spread round turn commissions. So I need .40 cents or as close to it as I can get, when selling the cheaper premium to turn the expected losing long option into a debit spread. Market movement fluctuates, so I will either make a net of $1.05 on my chosen running side, less the cost of the debit spread. I see the insurance aspects of this trade, you will win either way, if the market moves in one week, 1 strike on the debit spread side, a small amount I expect? On the side you expect to run, you would make less, eventually if you wait. And or be left over with a long option.
JR Brown says you can leg out of the side that did not work. Not sure how you would do that? Wait for market fluctuation I guess?
Just thinking out loud here. Talking to myself.
I think I got the initials wrong. I believe it is A J Brown. He sells a course.
The original claim he made was some years ago, but cannot find that website again. Must have deleted it? Sorry about that.
The original claim he made was some years ago, but cannot find that website again. Must have deleted it? Sorry about that.
Monday morning, bright and early. The jungle birds around the trees in this house, like to wake up and start chatting around 4:30 a.m. By 5 a.m. it is impossible to sleep for the ruckus. Some of them are very very loud.
I've picked out my CONDOR picks: APOL, WAG, LEN, MON, RMX.TO and QQQ. Did that Sunday afternoon. Got to look them up on charts and wait until market opens, which for me in my time zone is 7:30 a.m. That is the early morning chore, or one of them. Can't do anything before market opens though. Need the option chain.
To review what little I know about CONDORS. Think I have the difference between an IRON CONDOR and the CONDOR now in my mind clearly. The iron condor is composed of two credit spreads with CALLS on one side and PUTS on the other side. The CONDOR is either two call spreads, or two put spreads. ATTICUS tells me this is a BULL spread and Bear Spread setup. I haven't got it clear yet, but when I get the prices in an hour and a half, I believe I will find one is a credit spread, the other a debit spread. Not sure on that point yet.
My half straddle in which I am now holding 3 option contracts, that I want to break even, will depend on market direction today. Take a look at the E MINI about 7 a.m. local time. Am holding a Long Straddle. Ran across an interesting recommendation on the internet, which was to do what I am doing, using 90 to 120 away contracts. 3 to 4 months out. I am using 2nd, or 3rd month contracts, and certainly I agree with the use of 3 rd month contracts. Mostly because of the slow time involved with LONG STRADDLES, which can take a week to make a profit, but take up to 3 weeks to break even on the losing side. Time decay being the reason. Before you can close the trade completely.
I do have it in mind, that any side of a proposed WEEKLY CONDOR that has less than .15 cents credit is to be discarded. According to the recommendations on here, by you regular players. I'm not sure what kind of spread I would be left with, but think I can figure it out later. Thats my pre-morning work up, set, now I think I will go and do email. Helps me DON to think out loud and put my thoughts down in writing. BEFORE you complain.
Just having fun with you. 
I've picked out my CONDOR picks: APOL, WAG, LEN, MON, RMX.TO and QQQ. Did that Sunday afternoon. Got to look them up on charts and wait until market opens, which for me in my time zone is 7:30 a.m. That is the early morning chore, or one of them. Can't do anything before market opens though. Need the option chain.
To review what little I know about CONDORS. Think I have the difference between an IRON CONDOR and the CONDOR now in my mind clearly. The iron condor is composed of two credit spreads with CALLS on one side and PUTS on the other side. The CONDOR is either two call spreads, or two put spreads. ATTICUS tells me this is a BULL spread and Bear Spread setup. I haven't got it clear yet, but when I get the prices in an hour and a half, I believe I will find one is a credit spread, the other a debit spread. Not sure on that point yet.
My half straddle in which I am now holding 3 option contracts, that I want to break even, will depend on market direction today. Take a look at the E MINI about 7 a.m. local time. Am holding a Long Straddle. Ran across an interesting recommendation on the internet, which was to do what I am doing, using 90 to 120 away contracts. 3 to 4 months out. I am using 2nd, or 3rd month contracts, and certainly I agree with the use of 3 rd month contracts. Mostly because of the slow time involved with LONG STRADDLES, which can take a week to make a profit, but take up to 3 weeks to break even on the losing side. Time decay being the reason. Before you can close the trade completely.
I do have it in mind, that any side of a proposed WEEKLY CONDOR that has less than .15 cents credit is to be discarded. According to the recommendations on here, by you regular players. I'm not sure what kind of spread I would be left with, but think I can figure it out later. Thats my pre-morning work up, set, now I think I will go and do email. Helps me DON to think out loud and put my thoughts down in writing. BEFORE you complain.
Just having fun with you. Quote from falconview:
Monday morning, bright and early. The jungle birds around the trees in this house, like to wake up and start chatting around 4:30 a.m. By 5 a.m. it is impossible to sleep for the ruckus. Some of them are very very loud.
I've picked out my CONDOR picks: APOL, WAG, LEN, MON, RMX.TO and QQQ. Did that Sunday afternoon. Got to look them up on charts and wait until market opens, which for me in my time zone is 7:30 a.m. That is the early morning chore, or one of them. Can't do anything before market opens though. Need the option chain.
To review what little I know about CONDORS. Think I have the difference between an IRON CONDOR and the CONDOR now in my mind clearly. The iron condor is composed of two credit spreads with CALLS on one side and PUTS on the other side. The CONDOR is either two call spreads, or two put spreads. ATTICUS tells me this is a BULL spread and Bear Spread setup. I haven't got it clear yet, but when I get the prices in an hour and a half, I believe I will find one is a credit spread, the other a debit spread. Not sure on that point yet.
My half straddle in which I am now holding 3 option contracts, that I want to break even, will depend on market direction today. Take a look at the E MINI about 7 a.m. local time. Am holding a Long Straddle. Ran across an interesting recommendation on the internet, which was to do what I am doing, using 90 to 120 away contracts. 3 to 4 months out. I am using 2nd, or 3rd month contracts, and certainly I agree with the use of 3 rd month contracts. Mostly because of the slow time involved with LONG STRADDLES, which can take a week to make a profit, but take up to 3 weeks to break even on the losing side. Time decay being the reason. Before you can close the trade completely.
I do have it in mind, that any side of a proposed WEEKLY CONDOR that has less than .15 cents credit is to be discarded. According to the recommendations on here, by you regular players. I'm not sure what kind of spread I would be left with, but think I can figure it out later. Thats my pre-morning work up, set, now I think I will go and do email. Helps me DON to think out loud and put my thoughts down in writing. BEFORE you complain.
Just a question, why are you going in the 2nd to 3rd month to trade long straddles? Remember that less time decay means less gamma, in other words there is no advantage there over the short term straddles.
Also why would you discard a credit less than 15 cents? That depends entirely on context, the underlyer and the multiplier. Also, usually the less premium you take in the less risk there is of your option being hit...
Tsk Tsk
"why would you discard a credit less than 15 cents? That depends entirely on context, the underlyer and the multiplier. Also, usually the less premium you take in the less risk there is of your option being hit..."
You got me there. I don't know! I was just refreshing my memory from the couple of people that said they wouldn't trade a few cents in one of the Condor spreads. Haven't thought it out yet. Didn't even know I had to?
"why would you discard a credit less than 15 cents? That depends entirely on context, the underlyer and the multiplier. Also, usually the less premium you take in the less risk there is of your option being hit..."
You got me there. I don't know! I was just refreshing my memory from the couple of people that said they wouldn't trade a few cents in one of the Condor spreads. Haven't thought it out yet. Didn't even know I had to?
Well I was running the CONDOR preliminaries.
QQQ 64, 6, 62, 61
APOL 35, 34, 33, 32
WAG 33, 32, 31, 30
LEN 27, 26, 25, 24
MON 80, 79, 78, 77
rmx.to 3.50, 3.25, 3.00, 2.75
These might not be the right strikes. Haven't looked at the option chain yet. Market hasn't opened yet, and just done the charts.
QQQ 64, 6, 62, 61
APOL 35, 34, 33, 32
WAG 33, 32, 31, 30
LEN 27, 26, 25, 24
MON 80, 79, 78, 77
rmx.to 3.50, 3.25, 3.00, 2.75
These might not be the right strikes. Haven't looked at the option chain yet. Market hasn't opened yet, and just done the charts.
Meaning that you're not receiving enough of a credit on the wing to make it worth the potential for the flip deltas from + to -. Ugh, look at an example:
XYZ at 26.30
XYZ 26/27 call spread at $0.46
XYZ 26/27/28/29 call condor at $0.41
You save a nickel (gross) in the condor over the bull call vertical, but there is potential to go -delta in the condor as XYZ prints > 27.50. Why turn a bull spread into a bear spread for a nickel?
I think you're at an impasse as you can't visualize this as a debit spread (discount on the condor).
oKAAY! I trust ATTICUS advice, so if he says no it is no! On the 15 cents query. I'm a stupid novice trying to learn this stuff. I don't even know enough to ask a proper question yet. Trial and Error.
Well , my choices of WAG LEN, MON, got knocked out of the ratings. No weekly optins. RMX.to got knocked out also, as it had no options.
Leaving me for the weekly. QQQ and APOL condors.
QQQ buy 64 at .20, sell 63 at .54, sell 62 at 1.16, buy 61 at 1.97
APOL buy 35 at .13, sell 34 at .24, sell 33 at .59, buy 32 at 1.35
These would be paper trades. I'm just trying to learn this stuff and estimate the next Thursday, or Friday strikes.
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I'm a bit laborious with the calculations.
QQQ comes out for a debit of (-.47 cents)
APOL comes out for a debit of ( -.65 cents )
That looks about right to me? Need debits, because will buy it back cheaper in 3 to 5 days. If I have that right?
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Nothing moving with my Long Straddle cash stuff. Think I will put in my sell order for 3 contracts of the 60 half straddle puts I'm holding. As I need to close down and get a shower and prep for my expedition to Fortress USA Embassy in the capital Belmopan.
Well , my choices of WAG LEN, MON, got knocked out of the ratings. No weekly optins. RMX.to got knocked out also, as it had no options.
Leaving me for the weekly. QQQ and APOL condors.
QQQ buy 64 at .20, sell 63 at .54, sell 62 at 1.16, buy 61 at 1.97
APOL buy 35 at .13, sell 34 at .24, sell 33 at .59, buy 32 at 1.35
These would be paper trades. I'm just trying to learn this stuff and estimate the next Thursday, or Friday strikes.
_________________________________
I'm a bit laborious with the calculations.
QQQ comes out for a debit of (-.47 cents)
APOL comes out for a debit of ( -.65 cents )
That looks about right to me? Need debits, because will buy it back cheaper in 3 to 5 days. If I have that right?
_______________________________
Nothing moving with my Long Straddle cash stuff. Think I will put in my sell order for 3 contracts of the 60 half straddle puts I'm holding. As I need to close down and get a shower and prep for my expedition to Fortress USA Embassy in the capital Belmopan.
Re the question on 3 or 4 month out Long Straddles.
I believe you mentioned they can be slow movers. I KNOW they are most of the time.
I estimate holding the parts of a LONG STRADDLE for as long as 5 weeks, to close off just the one trade. The losing side is the one takes the long time to adjust and get out of without a loss. Therefore I need the TIME to let it work.
The monthly bar, runs about 5 to 7 strikes in the
QQQ. If I can get the break even, far enough away from the high or low of the monthly bar, in the center someplace, then given TIME say about 5 weeks in a worst case scenario, I should be able to close the trade with no loss. My GOAL is to have WINS but no LOSSES. IF I can make that happen, then the system is great. Remains to be seen. I can see me sometime getting caught in a long bull trend, which would force me to take a loss.
I believe you mentioned they can be slow movers. I KNOW they are most of the time.
I estimate holding the parts of a LONG STRADDLE for as long as 5 weeks, to close off just the one trade. The losing side is the one takes the long time to adjust and get out of without a loss. Therefore I need the TIME to let it work.
The monthly bar, runs about 5 to 7 strikes in the
QQQ. If I can get the break even, far enough away from the high or low of the monthly bar, in the center someplace, then given TIME say about 5 weeks in a worst case scenario, I should be able to close the trade with no loss. My GOAL is to have WINS but no LOSSES. IF I can make that happen, then the system is great. Remains to be seen. I can see me sometime getting caught in a long bull trend, which would force me to take a loss.