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RE: Question for the options gurus



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Big Question is :
1) how was 10/90 selected as the "optimum" say compared to "20/80" (remember
the ole 80/20 rule ?)
or even 10/50 or 14/64 ("14" is magic...remember ?)


> -----Original Message-----
> From: Tom Gentile [mailto:tom@xxxxxxxxxxxxxxx]
> Sent: Monday, September 11, 2000 12:24 PM
> To: omega-list@xxxxxxxxxx
> Subject: Re: Question for the options gurus
>
>
> Kent/ Traders,
>
> I have successfully traded the 10/90 vol at 50% or less.  Actually have it
> programmed on our website at http://optionetics.com under the
> platinum site.
> If your not registered, just sign up for a free trial and go to
> the section
> called my rank list.  From there, simply insert the 10/90SV in the proper
> boxes and click on "Quiet".  A list of the lowest vol to vol
> stocks, ranked
> from low to high ratio volatility stocks will appear.
>
> When you run the scan, realize that the stocks with ratios of .05
> .10, etc.
> are probably takeovers and the stock price has died.  So its a
> good idea to
> look at the charts of the stocks you rank.  I usually rank the top 500 by
> volume as to filter out the fantasy stocks (you know, the ones
> that look too
> good to be true).
>
> Its also a good idea to cull over the options that are very expensive in
> premium.  Right now, I would say that over half of the optionables trading
> are in the bottom 20% of their historical implied range from the last 2
> years.  Thats incredible when heading into October.  I have found
> that over
> the long haul, about 70 percent of these consolidation patterns lead to
> decent breakouts.  50% of them make a move in the first week of
> consolidation.  The rest I am finding take about 30 days to work out.  Its
> what you do with the options that make you a winner or a loser.
>
> My partner George Fontanills and I are writing a book on volatility with
> real life examples, and practical applications for use in volatility highs
> and lows, seasonal volatility, volatilty skews, skews by strike, skews by
> month, skews by arbitrage, etc.  Remember I am not a book writer, but a
> trader on the subject, but maybe that might not be such a bad thing.
>
> Tom Gentile
> Chief Options Strategist
> Optionetics.com
>
>
>