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this is off topic, but take into account that no
one can know, what will happen in 2006, ythats thaories of time forecast that
are extremely innacurate
but if you prefer you can think of it like this, if
you cant se that it doesnt exist, trading on someone eleses analysis is never
good
P
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
Martin
Blain
To: <A
title=Metastockusers@xxxxxxxxxxxxxxx
href="">Metastockusers@xxxxxxxxxxxxxxx
Sent: Tuesday, April 08, 2003 8:43
PM
Subject: Re: [Metastockusers] Stock
Option
Freddie Pablo
I was wondering if you could help with a few
beginner type questions?
I just became interested in Options and was
thinking of using it as a hedge as well as short term.
I am hearing rumors from many different areas
that the bottom will be in 2006. One chart actually mentions Dec 26 2006 and a
50% drop from here. I though a simple put on the DOW and NASDAQ would act like
a good hedge for my long positions. Using 5k as an example for two
PUTS leaps. First terminology. How would you state that. Buy a.... contract on
the ???
For a PUT on the DOW does drop 50% I would
be up how much? Obviously if I am wrong it is all gone.
I suppose if felt really strongly about this I
could by Call options on Gold
I was following ticker (VESA )
UESQD.X PUTS late last week and noticed it is now at 1.90 up from
1.60. If one was used to taking 10k positions on a stock could one now take 2k
positions. If so I would assume the most would lose is 2k if it
expired.
BTW I am back to using point and figure charts.
Regards Martin
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
Freddie
Ng
To: <A
title=Metastockusers@xxxxxxxxxxxxxxx
href="">Metastockusers@xxxxxxxxxxxxxxx
Sent: April 08, 2003 12:18 AM
Subject: Re: [Metastockusers] Stock
Option
Pablo,Thanks for the advise for buy/sell on
volatility. You are right, the IV high-low must have a base for reference,
otherwise it is meaningless. If we can have a historical volatility of
the option IV, that should serve our purpose, right ?. Apply IV/HV will then
yield the ratio, if ratio <1, buy and if ratio is >1 sell. Is this
what you use ? Thanks for the Meta HV formula, on comparison, I
realize I had it programmed in my indicator already. It was kind of you to
point out that HV is for stock and not on option. I would have taken it for
option.The IV indicator you mentioned is referring to the "option
volatility" in the indicator drop down menu ?As for the Greeks, as
an example, say you bought a call, its price will rise dollar for dollar
with the stock if delta is 1, if the delta is near to zero, even if the
stock gap up, you would not see any up price in option. Such position should
be disposed asap. Delta of 0.5 has the max time value with no intrinsic
value. If trade is against your direction, for every dollar of stock
decline, option will fall by 50cts. Direction is abstract if we can forecast
direction accurately, buy simple call and put will be neat, forget about
other complex strategies in options. Then we will enjoy the leverage in
options, less outlay and high % return. However, volatility could override
greeks.Best RegardsFreddie Ng
At 11:54 PM 4/7/2003 -0300, you wrote:
I
actually didnt mention specific options soft on account your request was
related to metastock capabilities and use for options, the best options
soft is optionvue, or you can use the web service of <A
href="">www.optionetics.com.<FONT
face=arial size=2>there is other site like <A
href="">www.IVolatility.com<FONT
face=arial size=2>forget about the greeks in my experience they dont add
anything crucial to your trading, but volatility is crucial, this was the
reason i used the ip/hv ratio when i was still investing in options in the
american marketmostly you must buy low
volatility and sell (or write) high volatility, but the problem is high or
low comparing to what, so i started to use the ratio to spot it fast, i
dont have the exact code for the ratio with me, but you can find the iv
indicator on metastock quick indicator list and for the hv i usethis
formula: <FONT face=arial
size=2>Std(Log(C/Ref(C,-1)),10)/Std(Log(C/Ref(C,-1)),100) <FONT
face=arial size=2>make notice that while the implied is calculated based
on the option price the hv is calculated on the
underlying. about the
group/industry ranked by their
volatility, you can find in the sites mentioned by me and debra that
infomation i never used it but
optionetics is very much discussed and recommended inoptions boards and
usenet groups, but as a rule you should check the cboe
site Bye
----- Original Message -----
From: Freddie Ng
To: <A
href="">Metastockusers@xxxxxxxxxxxxxxx
Sent: Sunday, April 06, 2003 10:13 PM
Subject: Re: [Metastockusers] Stock Option
Pablo,
Appreciate your valuable systematic explanation. Those points that
you discussed were very important in option trading. If it can determine
or anticipate the correct underlying direction, this info can then be
used to interpret the option direction. Call follows underlying while
Put is reverse. I also understand that not all indicators are suitable
for each stock and Metastock can search and match the best indicator to
optimized profit, I wonder if I had missed out anything in Metastock for
option.
Volatility(implied and Historical)
Keen to know how you use these info to analyze the option. I am
aware that one can lost trade due to volatility. You mentioned about use
ratio of IV & HV, can you elaborate a little bit more. The option
volatility indicator is for IV, how do you obtain HV in Metastock.
Btw, do you have any good source where I can obtain the volatility
info. Is there any such listing of group/industry ranked by their
volatility.
Best Regards
Freddie Ng
At 04:07 AM 4/5/2003 -0300, you wrote:
Freddie,
on using metastock for options you have 2 problems
1 Data problem
2 analysis problem
1 since options trade for a short period, the problem arises, you
cannot
make any analysis for a while, there is 2 ways around it :
continuos
contracts (i tried them for a while , but they are not reliable in
my
opnion), the alternative is using intraday data, so even if you
can make
analysis on daily charts for a while, at least you can run
intraday an.
2 about the analysis:
you must keep an eye on the stock or whatever the option is
for
then you can analyze the option itself by common tech an.
tools
then you have to keep an eye on implied volaitity and hystorical
volatility,
for while i used a ratio between the implied volatility and
hystorical
volatility
check the quick drop indicator youll find some options
indicators
Pablo
----- Original Message -----
From: "freddie_ng" <n07476@xxxxxxxxxxxxxx>
To: <Metastockusers@xxxxxxxxxxxxxxx>
Sent: Saturday, April 05, 2003 2:00 AM
Subject: [Metastockusers] Stock Option
> Hi all Metastock experts,
>
> Can anyone enlighten me how to make use of Metastock to trade
on
> options. I own a Metastock ver 8.0, just recently upgraded
from v7.2.
>
> Best Regards
> Freddie Ng
>
>
>
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