[realtraders] R credit spreads(puts and calls at same time) {04}

[Gwenael Gautier <ggautier@xxxxxxxxxxx>]

Thanks much for sharing, I've done similar things on TBonds but without buying
back the aisles systematically... Got a few questions:
1 - Did you study the 10 point spreads as well or for what reason did you
consider the 5 point spreads to be best?
2 - At what time of the month do you put these on? at expiry, a day befor or
after, or at months beginning?
3 - Do you ever move these or do you ALWAYS let them go to maturity?

Thanks very much again,

Gwenn




Proffittak@xxxxxxx wrote:

> In a message dated 11/29/99 10:55:59 AM Eastern Standard Time, fritz@xxxxxxxx
> writes:
>
> << Ben wrote:
>  > an  easy way  to do this is what i do all year
>  > i sell   DEC   825 oex calls and buy  DEC  830 calls
>  > i sell   DEC   700puts and buy  DEC  695 puts
>  > on a 250000  mutual  funds portfolio  i do  30  per month
>  > and   never have to worry
>  > (Max loss  is   15 times  500   minus  premium  collected)
>  > this  works   9  month out of   12
>
>  Sounds good!  Could Ben or someone else clarify this, in teensy tiny
>  words, for those of us without a lot of options background?
>
>  Ben said he puts on a spread 5% above/below current prices.  But 825
>  and 700 looks more like about 8.6% above/below the center price of
>  760 or so?
>
>  What do you mean by "on a 250k portfolio you do 30 per month" -- do
>  you mean it takes $250k/30=$8333 to put on one of these spreads, so
>  you do 30 of them in your account?  (What about the premium
>  collected?)  Or are there 30 different opportunities that arise each
>  month?
>
>  What is the expected gain from this 4-step spread?  In another note
>  Ben said he "looks for $3000" -- so do you make $3000 in 9 months,
>  and lose 15*$500 = $7500 in the other 3 months?  What situations
>  cause the $7500 loss?
>
>  Thanks,
>  Gary
>
>   >>
> hi
>
> The numbers used was just  an example!!
> The margin required  is  10000 plus  amount  of  options  timer spread
> risk($5),,
> So   if you have 100000   you can make  monthly  when vix is low 4500
> and when vix is hi  9000,,
>
> You must put the order as a  credit spread!!!
>
> You must put both put and calls at same time!!!
>
> (if you try to sell  one without the other  you risk BIG  losses)
> my   5 plus history  of transactions shows   9 good trades per year and 3
> losses per year
>
> When i ws talking about making  3000  it is for each 10  puts and 10 calls
> sold.
> (aprox spread for each is $1.5)
> hope this helps
> Ben