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<DIV><FONT color=#000000 size=2>What you're looking at doing is called a
"strangle," and in most cases buying it is the WORST of both
worlds. Here's why;</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT size=2>Out-Of-The-Money options decay FASTER than any other
strikes.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>If you really think the yen is going to bust out strongly, and
you have no idea which way.... you'd be better buying a STRADDLE (Call and Put
at the SAME strike) or even a "Guts-Straddle" (with the both the Put
AND the Call In-The-Money.)</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Better yet; Use a "Volatility Breakout"
entry;</FONT></DIV>
<DIV><FONT size=2>1) Find your best estimation of Support and
Resistance.</FONT></DIV>
<DIV><FONT size=2>2) Place a Market Buy on a Call, Contingent on the
market AT or Above your resistance line.</FONT></DIV>
<DIV><FONT size=2>3) Place a Market Buy on a PUT, Contingent on the market
AT or BELOW your Support line.</FONT></DIV>
<DIV><FONT size=2>4) Make both orders "OCO" (One Cancels the
Other), so that after you are in, the other is cancelled.</FONT></DIV>
<DIV><FONT size=2>5) Immediately on fill, place your stops!</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>Good Luck Trading!</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT><FONT size=2>Dave Donhoff</FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px">
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>Olukunmi Popoola <<A
href="mailto:popoola@xxxxxxxxxxxxxxx";>popoola@xxxxxxxxxxxxxxx</A>><BR><B>To:
</B>RealTraders Discussion Group <<A
href="mailto:realtraders@xxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxx</A>><BR><B>Date:
</B>Saturday, August 22, 1998 7:25 PM<BR><B>Subject: </B>Comments
anyone?<BR><BR></DIV></FONT>
<DIV><FONT color=#000000 size=2>I am thinking of buying 1 DEC Yen 7200 Call
and a DEC Yen 6800 put on Monday. The idea for the trade is as
follows:</FONT></DIV>
<DIV><FONT size=2>There may be intervention in the yen. This normally pushes
the yen up about 10 against the $ (that is approx 500points on the Future).
if that happens the call will be in the seriously money. The reason for the
put is to profit from any possible collapse in the honk Kong$ and the
Chinese currency in which case the Yen would be way past 150 making the put
seriously in the money. The only problem I can see is if all these dont
happen in time.</FONT></DIV>
<DIV><FONT size=2>Comments please</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Thanks.</FONT></DIV>
<DIV><FONT size=2> </FONT></DIV></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Sat Aug 22 22:16:58 1998
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From: "khanitha" <charlie@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: Yen Option Strangles (Don't)=problem
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one problem,
throw both those theories out the window if:
1 - options don't trade at night, right?
2- if you wait until, as you suggest, the big move will more than likely
occur while you are sleeping and the japanese are eating sushi!
3- i would buy a call and put at 7000 before any news or big move and wait
for a big move, if it never occurs and stays locked side-ways at 7001, what
did you risk?
can you afford to lose it all and still subscribe to the money management
theory, meaning, will you still have 95% of your bank-roll intact, if so,
GO FOR IT !!!
gary
hawaii
----------
From: David Donhoff <deltaforce@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Yen Option Strangles (Don't)
Date: Saturday, August 22, 1998 6:50 PM
What you're looking at doing is called a "strangle," and in most cases
buying it is the WORST of both worlds. Here's why;
Out-Of-The-Money options decay FASTER than any other strikes.
If you really think the yen is going to bust out strongly, and you have no
idea which way.... you'd be better buying a STRADDLE (Call and Put at the
SAME strike) or even a "Guts-Straddle" (with the both the Put AND the Call
In-The-Money.)
Better yet; Use a "Volatility Breakout" entry;
1) Find your best estimation of Support and Resistance.
2) Place a Market Buy on a Call, Contingent on the market AT or Above your
resistance line.
3) Place a Market Buy on a PUT, Contingent on the market AT or BELOW your
Support line.
4) Make both orders "OCO" (One Cancels the Other), so that after you are
in, the other is cancelled.
5) Immediately on fill, place your stops!
Good Luck Trading!
Dave Donhoff
-----Original Message-----
From: Olukunmi Popoola <popoola@xxxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Saturday, August 22, 1998 7:25 PM
Subject: Comments anyone?
I am thinking of buying 1 DEC Yen 7200 Call and a DEC Yen 6800 put on
Monday. The idea for the trade is as follows:
There may be intervention in the yen. This normally pushes the yen up
about 10 against the $ (that is approx 500points on the Future). if that
happens the call will be in the seriously money. The reason for the put is
to profit from any possible collapse in the honk Kong$ and the Chinese
currency in which case the Yen would be way past 150 making the put
seriously in the money. The only problem I can see is if all these dont
happen in time.
Comments please
Thanks.
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