What Option Strategy Do You Use?

[taowave]

Yup.... legged out of conversions for 100 dollars plus..Merril came in buying to close,market orders..
I think 200 vol plus..

They came back weeks later and had the AMEX ask for significantly better fills.

I left the Amex

 

[ironchef]

Sell enough garbage puts and volatility will become risk of ruin.

Speaking for myself,when the market proves me wrong,I am out of time

Totally agree with you on that.

That is why I became a buyer of garbage calls and puts. Risks are bounded from the get go.

 

[Quanto]

Let's say your option is in the money at $100 a share and you have the right to exercise but don't want to for whatever reasons and want to exercise a year from now. You sell a 1 yr call above $100 and use the proceed to buy a 1 yr put below $100. Net cost zero and your gains will be bounded by those two strike prices.

Yes, I now remember as I had played with it some weeks ago:
OTM SC + OTM LP : https://optioncreator.com/stmw6ky
synthetics using SS + OTM SP + OTM LP : https://optioncreator.com/sthyy3m
BUT: in both cases requires a MarginAcct (in CashAcct not possible)

Hmm. but how does this work with the already present option together (ie. the said ITM one)?

 

[taowave]

Ive taken some monster hits short near by gamma,and in the words of Carly Simon,"I havent the need for the pain"

Totally agree with you on that.

That is why I became a buyer of garbage calls and puts. Risks are bounded from the get go.

 

[ironchef]

https://www.thestreet.com/personal-finance/harvard-money-manager-graduates-to-hedge-fund-722515

In 87 when vol popped he returned well into three figures, but times and hedging techniques have changed in the ensuing years.

Jacobson?

 

[ironchef]

Yes, I now remember as I had played with it some weeks ago:
OTM SC + OTM LP : https://optioncreator.com/stmw6ky
synthetics using SS + OTM SP + OTM LP : https://optioncreator.com/sthyy3m

BUT: in both cases requires a MarginAcct (in CashAcct not possible)

Usually the brokerage who manages your company's stock options will work with you on margin, etc.

 

[wxytrader]

Ive taken some monster hits short near by gamma,and in the words of Carly Simon,"I havent the need for the pain"

The ebb and flow of the price action gives you an out all the time. Even if you have a flash crash, it's back up in no time. So where's the risk? The only risk is BK

 

[wxytrader]

The ebb and flow of the price action in a downtrend mitigates losses if you let it. Just this week I think my clsk CSP was like $4 in the money or something and then it was back up to $2 in the money at exp so I got assigned. Now I flip and sell calls. You pussies would have closed the position. And that was one of the worst ones. Usually they go in the money and then they close out of the money.

Even if you have a flash crash, it's back up in no time. So where's the risk? The only risk is BK

 

[Quanto]

Usually the brokerage who manages your company's stock options will work with you on margin, etc.

Can you check whether the following depicts the situation correctly?
https://optioncreator.com/st1xfpt
Of course the IVs can be different.
By setting Qty=0 and then 1 you see the change in the PnL chart...

 

[taowave]

Yes,but only cash secured,which essentially treats .20 delta a 1.00 eliminating leverage and hence real "bank"

The ebb and flow of the price action gives you an out all the time. Even if you have a flash crash, it's back up in no time. So where's the risk? The only risk is BK