|
PureBytes Links
Trading Reference Links
|
Back-up up research in response to a question:
The $1500 premium for selling a put and a call is actually an average on the
low side of what I have seen over the last 6 months at the initiation of a
new position and pretty close to what this play might yield.
The protection price is based upon what it would have cost Fri. to buy a
1440 call when the market closed around 1415,in other words 25 points away
as described in my example.This would be worse case since the option value
would decrease as it approaches expiration.
Believe it or not this technique may have even greater profit potential with
lower risk when applied to 2 month out options and 15% on either side of the
close 'witchy Fri.'
I will keep you posted with actual plays when I am ready.
John
>From: "Dr. John Cappello" <jvc689@xxxxxxxxxxx>
>Reply-To: jvc689@xxxxxxxxxxx
>To: <realtraders@xxxxxxxxxxxxxxx>
>Subject: [realtraders] Cappello Strangles {01}
>Date: Fri, 26 Nov 1999 19:02:55 EST
>
>I am going to try to stir interest in this one more time.I have been
>studying this and hate failure.In my pursuit I have not come across this
>method which concivably could work 9 of 10 times.In examination you will
>see
>price is set 7% from upper and lower limits penetration that may only
>happen
>1 or 2 times per year.Assuming the worst [$1500 premium X 10 wins = $15,000
>- protection cost - premium or $3500 -$1500 [2 X $2000]= $11,000 profit per
>Strangle per year.My estimate is $7500 per Strangle could make this
>lucrative.
>> >
>> > I think Strangles are doable if:
>> >
>> > 1.You can sell a 1510 call at a decent price.
>> >
>> > 2.Sell a 1320 put at a decent price.
>> >
>> > Protect the position by buying a 1510 call if S&P
>> > hits 1485 and buying a 1320 put if S&P hits 1345.
>> >
>> > Comments?..Suggestions?..Critique?..Help?..
>> >
>> > Thanks,
>> >
>> > John
>
>
>______________________________________________________
>Get Your Private, Free Email at http://www.hotmail.com
>
______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com
|