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Dear Kohath:<br>
<br>
Options are fine trading instrument with endless strategy to sute any
particular case. And if you come up with absolutely new strategy there
are exotic options to tailor to your "crazy" case.<br>
<br>
In case of OEX example you can sell the call and then buy another call of
the higher strike price. Then you loss will be limited to the difference
between price strikes (it is not so bad). For instance, if you take in a
$1.00 credit for your spread (sell call, buy call) and spread is only $5
a part, then only after 4 successful trades you are home free (cannot
loose any money). Plus, it requires a total disaster to lose all $4
dollars. Why not to loose, let us say, $2 and quit (I have heard that it
is beautiful right now in Tahiti). Just as example. There is a strategy
for everyone.<br>
<br>
Yours, Alex.<br>
<br>
At 12:05 PM 7/15/99 -0500, kohath wrote: <br>
<blockquote type=cite cite> <br>
<font size=2>Yes, I believe that brokers that allow you to do these
trades want $100,000+ in your account.</font><br>
<br>
<font size=2>And you are right, in that going long/short, selling puts,
calls, would be beyond most persons ability to keep track of what the
blank was happening during the trade.</font><br>
<br>
<font size=2>Selling puts/calls is exactly the opposite of buying
puts/calls. Selling gives limited profit, unlimited risk, buying
gives limited risk, unlimited profit. I would imagine there are
those who have lost it all selling options, in only a few hours.
Think of it, you trade 12 times per year, and put lets say $1,500 in your
account each trade (sell). It only takes once during the year for
the stock to tank (selling puts), or rocket up (selling calls) for you to
easily lose $10,000+ against the $1,500 you made. If it happens
twice during the year, your goose is cooked. The odds, in the long
run, are stacked against you. I know someone who sold calls/puts
for a while and was making good money on the OEX. Well, one mistake
is all it takes. He sold calls before greenbacks lowered the
Interest rate. Lost a lot of money in the process. The market
makers will not let you cover until the initial run is done, and when it
was announced the interest rates were lowered, the OEX shot up like a
rocket. Calls went from $1.5 to I believe around $22 in an hour or
so. Think about it.</font><br>
<br>
<br>
----- Original Message ----- <br>
<b>From:</b> RAY RAFFURTY <br>
<b>To:</b> kohath <br>
<b>Sent:</b> Thursday, July 15, 1999 11:57 AM<br>
<b>Subject:</b> Re: Puts and Calls<br>
<br>
Hi kohath,<br>
<br>
You are correct, but what you are describing is an "uncovered
straddle write" and involves 2 transactions, selling one call and
selling 1 put. It is profitable if the underlying moves very little
before expiration and has limited profit potential and unlimited
risk.<br>
<br>
What Dave was talking about was a "covered straddle write"
involving 4 transactions, long stock, short stock (or long a put), short
puts, and short calls. I believe the costs of establishing such a
position would be prohibitive for the average trader.<br>
<br>
Good luck and good trading,<br>
<br>
Ray Raffurty<br>
<br>
----- Original Message ----- <br>
<b><blockquote type=cite cite>From:</b>
kohath <br>
<b>To:</b> RealTraders <br>
<b>Sent:</b> Thursday, July 15, 1999 12:33 PM<br>
<b>Subject:</b> Re: Puts and Calls<br>
<br>
<font size=2>Correct me if I am wrong, for I am no expert in Options, but it seems that if you sell a call and sell a put, you would want the stock to go exactly no where to make money so that you kept the money that you received when you sold and are not required to buy to cover at or before expiration. These of course are naked.<br>
<br>
If you sell a call you would want the stock to go down, and if you sell a put you would want the stock to go up.<br>
<br>
Kohath<br>
<br>
</font>----- Original Message ----- <br>
<b>From:</b> RAY RAFFURTY <br>
<b>To:</b> RealTraders <br>
<b>Sent:</b> Thursday, July 15, 1999 10:53 AM<br>
<b>Subject:</b> Re: Puts and Calls<br>
<br>
Hi Dave.<br>
<br>
What are you using to cover the put? When you write a put you must be prepared to accept the stock and pay for it at the strike price you wrote. If you are exercised you have no choice in the matter. With the covered call you must deliver the stock if you are exercised, but you all ready own it at a lower price than the strike you wrote.<br>
<br>
Technically the only way to cover a put is with another put of an equal or grater strike price. For margin purposes you can also cover a put by shorting the stock. So to have both a covered call and a covered put, you could own the stock, sell the call, short the stock (or buy a put) and sell the put. Trying to figure if this would ever be profitable, with commissions, is giving me a headache. Basically it would take an extreme move in either direction to overcome the coat of setting up such a position.<br>
<br>
There are times when it makes sense to have a covered call (own the stock and sell the call) and BUY an out of the money put. This reduces your max. risk to the difference in the two strikes. For example, recently you could have bought AT&T (T) at about 57. You could have sold a leap Jan 02 $55 Call for about 15. You would be protected down to 42 (57-15). At the same time you could have bought a Jan 2000 45 put for 1-1/4. Basically you have insured your position against loss until expiration in Jan. 2000 when you would have to buy another put if the position was still open.<br>
<br>
Hope this helps.<br>
<br>
Good luck and good trading,<br>
<br>
Ray Raffurty<br>
<blockquote type=cite cite>----- Original Message ----- <br>
<b>From:</b> pressdl <br>
<b>To:</b> RealTraders <br>
<b>Sent:</b> Wednesday, July 14, 1999 9:17 PM<br>
<b>Subject:</b> OPT: Puts and Calls<br>
<br>
<font face="arial" size=2>A question relating to options.. Is it ok to write covered calls and covered puts on the same equity in my account (Same expiration date --obviously different prices)?? Does it ever make sense?<br>
<br>
Dave</font></blockquote></blockquote></blockquote><br>
</html>
</x-html>From ???@??? Thu Jul 15 13:09:51 1999
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Message-ID: <002001becef4$2dcffca0$aebc3fd1@xxxxxxxxxxxxxx>
From: "Terry S. Smith" <tesla@xxxxxxx>
To: "charles meyer" <chmeyer@xxxxxxxx>, "Larry Muir" <trdoptions@xxxxxxxxxxx>,
<JCDuffy@xxxxxxx>, <mseflin@xxxxxxxxxxxxx>
Cc: <realtraders@xxxxxxxxxxxx>, <info@xxxxxxxxxxxxxxxxxxxxx>,
<boggio@xxxxxxxxx>
Subject: Re: GEN: DUCKS, ASTROLOGY, ETC......
Date: Thu, 15 Jul 1999 11:59:31 -0700
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Status:
What ever happened to trading what you see. I studied astrology for years
and finally gave it up. Telling the markets what to do simply does not work.
Why? The markets do not know Sun Conjunct Jupiter is bullish nor does the
market care. As Joe Ross says TRADE THE TRUTH, the truth, being price
action, and price action alone. My trading has improved immensely since I am
now trading price action NOT ASTROLOGICAL PREDICTIONS.
-----Original Message-----
From: charles meyer <chmeyer@xxxxxxxx>
To: Larry Muir <trdoptions@xxxxxxxxxxx>; JCDuffy@xxxxxxx <JCDuffy@xxxxxxx>;
mseflin@xxxxxxxxxxxxx <mseflin@xxxxxxxxxxxxx>
Cc: realtraders@xxxxxxxxxxxx <realtraders@xxxxxxxxxxxx>;
info@xxxxxxxxxxxxxxxxxxxxx <info@xxxxxxxxxxxxxxxxxxxxx>; boggio@xxxxxxxxx
<boggio@xxxxxxxxx>
Date: Wednesday, July 14, 1999 3:45 PM
Subject: Re: GEN: DUCKS, ASTROLOGY, ETC......
>Larry:
>
>It's a good way to go broke.....
>
>Chas
>-----Original Message-----
>From: Larry Muir <trdoptions@xxxxxxxxxxx>
>To: JCDuffy@xxxxxxx <JCDuffy@xxxxxxx>; mseflin@xxxxxxxxxxxxx
><mseflin@xxxxxxxxxxxxx>; chmeyer@xxxxxxxx <chmeyer@xxxxxxxx>
>Cc: realtraders@xxxxxxxxxxxx <realtraders@xxxxxxxxxxxx>;
>info@xxxxxxxxxxxxxxxxxxxxx <info@xxxxxxxxxxxxxxxxxxxxx>; boggio@xxxxxxxxx
><boggio@xxxxxxxxx>
>Date: Wednesday, July 14, 1999 3:58 PM
>Subject: Re: GEN: DUCKS, ASTROLOGY, ETC......
>
>
>>There was an article in The Technical Analysis of Stocks and Commodities
>>magazine about trading one of the agricultural commodities with astrology.
>>It said in the article that this market went up on the full moon and down
>on
>>the new moon. It would be interesting to mark the new and full moons on an
>>SP500 chart and see what it looked like.
>>
>>
>>
>>>From: JCDuffy@xxxxxxx
>>>To: mseflin@xxxxxxxxxxxxx, chmeyer@xxxxxxxx
>>>CC: realtraders@xxxxxxxxxxxx, info@xxxxxxxxxxxxxxxxxxxxx,
boggio@xxxxxxxxx
>>>Subject: Re: GEN: DUCKS, ASTROLOGY, ETC......
>>>Date: Thu, 8 Jul 1999 21:35:44 EDT
>>>
>>>In a message dated 99-07-08 00:28:15 EDT, mseflin@xxxxxxxxxxxxx writes:
>>>
>>><< please...this
>>> conversation is not useful to the majority of participants >>
>>>
>>>
>>>I do not use astrology to trade, nor do I know much about it. That is why
>I
>>>found it precisely interesting. How do you what the "majority" of other
>>>people think about a discussion, or whether or not it is useful to them?
>>
>>
>>______________________________________________________
>>Get Your Private, Free Email at http://www.hotmail.com
>>
>
>
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