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In a message dated 1/28/00 4:15:39 PM Eastern Standard Time, fritz@xxxxxxxx
writes:
<< Thanks very much for clarifying that, Ben!! That approach seems to
make a lot of sense for long-term trades like you're doing. I don't
think it would work for a system like mine, though, where I'm in &
out of trades in a few days and play both directions.
I will definitely keep your strategy in mind for later, though!
So if the market dips down to or below your put, do you just hold on
and let the increase in put value take care of you while you wait for
the market to come up again? When it dips below the 55XMA and you
exit your position, you hold onto the puts -- do you just let them
expire if the market stays down for a long time?
I take it you're flat now, since we dropped below the 55XMA on
Monday. What level of puts where you holding when that happened --
1425 or so, since the mkt had been up around 1450? You said you
bought puts about 25pts below. You must have to roll those up pretty
frequently when the market goes up 25pts every couple of weeks!
Don't the option rolls kill you?
Do you run this in the opposite direction when the market heads down?
I'll bet this approach really lowers your stress. Not only do you
not have to worry about getting whacked in a big move, you really
don't even care if the market turns against you. When it fell on
Monday your SP/DJ/ND/NYFE positions went sour, but presumably the
puts appreciated in value enough to counteract a lot of that. So you
didn't even have to worry about catching the optimum exit or anything
like that. Very very nice.
I never would have figured this out. I still don't have a good feel
for exactly how it will work out in various situations. I couldn't
trade it now because I don't understand exactly how to manage it.
Guess I need to develop a better feel for options at some point...
Thanks,
Gary
>>
Hello
>From what you have described it seems to me you DO have a pretty good
feel of the option situation
As you know catching in one year 260-350 points in SP is a lot of money
(one nyfe is actually equal to 2 Big SP)!
SO
why have the hassle and stress of average trade of 2200 if you can make so
much more money position trading,
My exit is on the HOURLY 50 and 55 exp. m/a for 50% of the position
and the rest at DAILY 50 and 55 exp. m/a
and ..
Yes i do change and adjust the options to always give me a win /loss
ratio
of 4 to 1
and
I also go short.
when we close under the 89 hours exp. m/a i open 50% of short
and when we close under the 89 days expo m/a i open the full short
the adjustment on the options is done a: 50 point move or
b: 3 weeks past by
from initial
purchase
(whichever comes first)
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