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I don't thinkyou need any correction. Your way is also good. If someone is
more comfortable with future your way is excellent.
Dom
----- Original Message -----
From: "Robert Hodge" <r-hodge@xxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxx>
Sent: Sunday, December 10, 2000 3:56 PM
Subject: RE: [RT] Re: Trading Events
> Perhaps a cheaper way is to buy either the put or the call and take an
equal
> and opposite position in the relevant futures contract (eg buy a call and
> short the future). I think this would be less sensitive to any (likely)
fall
> in implied vols after the tension is released by the news coming out while
> still having the same fundamental characteristics as a straddle.
>
> Perhaps an options guru can correct me though :)
>
> Regards,
>
> Robert
>
>
>
> -----Original Message-----
> From: Dom Perrino [mailto:domenick@xxxxxxxxxxxx]
> Sent: 10 December 2000 20:03
> To: realtraders@xxxxxxxxxxx
> Subject: Re: [RT] Re: Trading Events
>
>
> Don, I know exactly what you mean.One of the best ways to catch those big
> short term moves would bring us back to your original thought regarding
use
> of options and other strategies some of which were mentioned by Ira.One of
> the least complex strategies to catch a big move prior to release of
> important economic figures ,cpi, ppi, employment etc. would be to buy a
> straddle on the instrument we think is going to make a big move but we
want
> to limit risk and be on the right side whether the big is up or down .
>
> If the move is substantial we would exit the put or the call at a profit
> thus recovering the cost of both the call and the put. In, addition, we
> would still have either the put or the call in our possession. This would
be
> a freebie and we could unload it if a quick reversal occurs. In any event
> since we already recovered its cost we could just sell it since it served
> its purpose. The major problem with the straddle is that it can be
expensive
> especially if you stick to the true definition of a straddle i.e. same
> strike price A good way to reduce the cost would be to buy the call and
put
> 5 points away from the current price of the instrument Hope this is more
on
> your point.
> Regard,
> Dom . .
> ----- Original Message -----
> From: "Don Ewers" <dbewers@xxxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxx>
> Sent: Sunday, December 10, 2000 2:17 PM
> Subject: Re: [RT] Re: Trading Events
>
>
> > Dom,
> > I think we are on the same page, because in your scenario there is no
> "news
> > reversal" the exist trend continues. The other thing to keep in mind is
> the
> > type of trades I am discussing are very short term in nature, a few
hours
> to
> > a day at best. Kind of like a capitulation.
> > don ewers
> > ----- Original Message -----
> > From: "Dom Perrino" <domenick@xxxxxxxxxxxx>
> > To: <realtraders@xxxxxxxxxxx>
> > Sent: Sunday, December 10, 2000 11:08 AM
> > Subject: Re: [RT] Re: Trading Events
> >
> >
> > > Don, I basically agree that reaction to news is more important (or at
> > least
> > > as important ) than the news itself. However, I have noticed on many
> > > occassions that looking at a chart prior to a major news event the
> > > chart(whatever the entity) indicated that if it was on a sell negative
> > news
> > > came out and the news confirmed the chart. The reverse for positive
> > > news.Even if this is not always the case, a glance at the chart of the
> > > entity you are trading will be of help or at least increase the odds
in
> > your
> > > favor when making a decision .The "Markets" seem to take on a mind of
> > their
> > > own . The participants individually don't know but when the crowd
> becomes
> > > one ,it forms the mind of the market , and this mind knows all that
is"
> > > knowable"
> > > Dom
> > > ----- Original Message -----
> > > From: "Don Ewers" <dbewers@xxxxxxxxxxxxx>
> > > To: <realtraders@xxxxxxxxxxx>
> > > Sent: Sunday, December 10, 2000 11:07 AM
> > > Subject: Re: [RT] Re: Trading Events
> > >
> > >
> > > > Dan,
> > > > Sure it really quite simple a simple trade to understand and not my
> own
> > (a
> > > > fellow trader shared it with me). Basically it is the
acknowledgement
> > > that
> > > > the "news or trading event" is already discounted in the price of
the
> > > > commodity. A reaction to the news occurs, but then the reaction
> quickly
> > > > fails. Grain traders use it frequently on a grain report day but
the
> > > bonds
> > > > and SP's with the current volatility are other good places to watch
> for
> > "a
> > > > news reversal trade".
> > > >
> > > > It is also discussed in the Raschke/Conners book "Street Smarts" I
> > think,
> > > > which may have been the trades origin, or at least documented.
> > > >
> > > > Basically when a market moving event is about to happen you note the
> > price
> > > > of the underlying commodity, then after the commodity reacts to the
> > event
> > > ,
> > > > lets say up for example, you place a sell stop at the price the
> > commodity
> > > > was at "before the event". If the commodity trades back down to that
> > price
> > > > you go short. They actually happen quite frequently.
> > > >
> > > > Here is an example, it is widely expected (or maybe not) that the
crop
> > > > report might show less yield, smaller acreage, larger exports
whatever
> > for
> > > > soybeans. The price prior to the report (the previous day because
crop
> > > > reports are at 7:30 am as I recall) had a range of $5.05 to $5.10
> > closing
> > > at
> > > > $5.08. The report comes out and beans when they open at 9:30 am gap
or
> > > trade
> > > > up to $5.21. At that point you would place a sell order at $5.10 and
> if
> > > > beans trade back into the previous days range you go short with a
stop
> > at
> > > > the gap high or a money stop whichever works with the risk you wish
to
> > > take.
> > > > Exit the trade (hopefully profitably) using any number of profit
> taking
> > > > techniques. The reversal in the commodity occurred because a
majority
> > of
> > > > the news was already in the price prior to the news. When the news
> came
> > > out
> > > > a few people/traders react to it only to find out that most people
are
> > > ready
> > > > to take their profits after the initial reaction. This profit
taking
> is
> > > the
> > > > reason the price declines and if it trades back into the prior range
> > > > increased selling occurs from those who were recently long hoping
for
> a
> > > > positive reaction.
> > > >
> > > > Several other examples happened this past Friday. Some people were
> long
> > > the
> > > > SP in the afternoon prior to the two court rulings around 1395
feeling
> > it
> > > > may go Bush's way. The ruling came out and the spoos rallied to
1404,
> > if
> > > a
> > > > sell stop was placed at 1395 you would have gone short and they
traded
> > > back
> > > > down to 1388 area. The bonds were another example opening at 7:20 at
> > > 103-21
> > > > and prior to the employment report they were around 103-25ish (a
> bullish
> > > > report was expected), the report came out the bonds traded to
103-31,
> at
> > > > that point place a sell order at 103-25 or slightly below since the
> > range
> > > > was tight. The report was not as bullish as expected, there was a
> slight
> > > > reaction up, then profit taking set in.
> > > >
> > > > The news reversal is simply buy the rumor sell the fact or sell the
> > rumor
> > > > buy the fact which may explain Intel's short term reaction to bad
> news.
> > > > "That warn" was already in the price of the stock, it was not a
> surprise
> > > to
> > > > most. Hope this all helps. Like I said they happen all the time.
Said
> > > simply
> > > > "it is not the news but the reaction to it that is important".
> > > > don ewers
> > > >
> > > > ----- Original Message -----
> > > > From: "Dan Cash" <dcash@xxxxxxxxxxxx>
> > > > To: <realtraders@xxxxxxxxxxx>
> > > > Sent: Saturday, December 09, 2000 9:17 PM
> > > > Subject: Re: [RT] Re: Trading Events
> > > >
> > > >
> > > > > Don,
> > > > >
> > > > > Do you mind expanding on your trading news reversal technique in
any
> > > > detail you
> > > > > care to, I would appreciate the insight?
> > > > >
> > > > > Dan
> > > > >
> > > > > Don Ewers wrote:
> > > > >
> > > > > > Ira,
> > > > > > Can you enlighten us with an example, since I only trade, "what
> are
> > > > billed
> > > > > > as major event s" from the "news reversal trading technique".
> > > Obviously
> > > > your
> > > > > > expertise utilizing options would be a welcome trading technique
> > that
> > > we
> > > > may
> > > > > > be able to learn from. I normally go flat ahead of these events
> > > feeling
> > > > it
> > > > > > is gambling in lieu of trading, so I am anxious to hear your
> reply.
> > > > > > don ewers
> > > > > > ----- Original Message -----
> > > > > > From: "Ira Tunik" <ist@xxxxxx>
> > > > > > To: <realtraders@xxxxxxxxxxx>
> > > > > > Sent: Thursday, December 07, 2000 1:22 AM
> > > > > > Subject: Re: [RT] Dow
> > > > > >
> > > > > > > If one is just trading the underlying, then a cardinal rule
> should
> > > be
> > > > to
> > > > > > be out
> > > > > > > of the markets when major announcements are to be made. If you
> > know
> > > > how to
> > > > > > > utilize options in volatility positions that are non
> directional,
> > > then
> > > > you
> > > > > > put
> > > > > > > on these positions just before announcements are made and
trade
> > the
> > > > > > volatile
> > > > > > > swings with glee. The bonds are a classic example of where
this
> > > works
> > > > > > > wonderfully. There is sufficient liquidity in both the options
> and
> > > > > > underlying
> > > > > > > bonds to allow one to trade some of the huge swings the bonds
> are
> > > know
> > > > to
> > > > > > make.
> > > > > > > Ira.
> > > > > > >
> > > > > > > Don Ewers wrote:
> > > > > > >
> > > > > > > > Dom, all-,
> > > > > > > > True, but one should not neglect events that "make the
> charts",
> > > > meaning
> > > > > > > > sometimes charts say one thing and an event and the price
> > reaction
> > > > to
> > > > > > it,
> > > > > > > > makes the chart say quite another and therefore a different
> > story
> > > > > > unfolds.
> > > > > > > > We need to be flexible enough in our trading to accommodate
> > this.
> > > > Charts
> > > > > > > > rule until they fail, one good reason depending on your
> trading
> > > > > > timeframe to
> > > > > > > > avoid major events that have been built up to be market
> movers.
> > It
> > > > is OK
> > > > > > to
> > > > > > > > stand aside at times and let the story be told?
> > > > > > > > don ewers
> > > > > > > >
> > > > > > > > ----- Original Message -----
> > > > > > > > From: "Dom Perrino" <domenick@xxxxxxxxxxxx>
> > > > > > > > To: <realtraders@xxxxxxxxxxx>
> > > > > > > > Sent: Wednesday, December 06, 2000 9:46 PM
> > > > > > > > Subject: Re: [RT] Dow
> > > > > > > >
> > > > > > > > > My belief is that technical analysis already reflects
> ALL,that
> > > is
> > > > > > known
> > > > > > > > > about a stock including all fundamental factors. I believe
> > that
> > > is
> > > > the
> > > > > > > > > standard belief of technicians. It seems that is what you
> are
> > > also
> > > > > > saying.
> > > > > > > > > My original email to Bob may have been ambiguous.
> > > > > > > > > Dom ----- Original
> > > > Message -----
> > > > > > > > > From: "Ira Tunik" <ist@xxxxxx>
> > > > > > > > > To: <realtraders@xxxxxxxxxxx>
> > > > > > > > > Sent: Wednesday, December 06, 2000 10:03 PM
> > > > > > > > > Subject: Re: [RT] Dow
> > > > > > > > >
> > > > > > > > >
> > > > > > > > > > Those factors would all have been factored in before you
> > > > selected
> > > > > > the
> > > > > > > > > stock to
> > > > > > > > > > trade. They would be terrible if you were looking for a
> > short
> > > > in a
> > > > > > down
> > > > > > > > > market
> > > > > > > > > > and they would be wonderful if you were looking for a
> stock
> > to
> > > > trade
> > > > > > in
> > > > > > > > an
> > > > > > > > > up
> > > > > > > > > > market. After the selection, you would trade it
> > technically.
> > > > Ira
> > > > > > > > > >
> > > > > > > > > > Dom Perrino wrote:
> > > > > > > > > >
> > > > > > > > > > > Bob,
> > > > > > > > > > > In your opinion,what would you consider key
differences
> > > > between a
> > > > > > > > > technician
> > > > > > > > > > > and a fundamentalist ( like yourself ) if both let the
> > > market
> > > > tape
> > > > > > > > call
> > > > > > > > > the
> > > > > > > > > > > shots on a day to day basis, and, as you well put it,
> > > keeping
> > > > the
> > > > > > > > > account
> > > > > > > > > > > healthy.
> > > > > > > > > > > It would seem to me that the technician would have an
> > easier
> > > > job
> > > > > > since
> > > > > > > > > on a
> > > > > > > > > > > short term basis p/e, book value,sales, balance sheet,
> > > current
> > > > > > ratio
> > > > > > > > > > > etc.would not need to be factored into the trade .
> > > > > > > > > > > Dom
> > > > > > > > > > >
> > > > > > > > > > > ----- Original Message -----
> > > > > > > > > > > From: "Bob" <bobskc@xxxxxxxxxxxx>
> > > > > > > > > > > To: <realtraders@xxxxxxxxxxx>
> > > > > > > > > > > Sent: Wednesday, December 06, 2000 1:21 PM
> > > > > > > > > > > Subject: Re: [RT] Dow
> > > > > > > > > > >
> > > > > > > > > > > > An elitist? I hope not and I certainly hope that
you
> > > detect
> > > > a
> > > > > > man
> > > > > > > > who
> > > > > > > > > > > > doesn't send insulting comments about someone he
knows
> > > > nothing
> > > > > > > > about.
> > > > > > > > > > > >
> > > > > > > > > > > > As to the content of my mail, I was trying to state
> that
> > > as
> > > > long
> > > > > > as
> > > > > > > > > > > > liquidity and beta are the principal drivers of the
> nas
> > > > while
> > > > > > value
> > > > > > > > > and
> > > > > > > > > > > > common sense take a back seat, all gains should be
> > viewed
> > > as
> > > > > > > > temporary
> > > > > > > > > and
> > > > > > > > > > > > unsustainable. As to "burning flesh", I don't care
> > which
> > > > way
> > > > > > this
> > > > > > > > > market
> > > > > > > > > > > > goes as long as it goes .. I let the market tell me
> what
> > > to
> > > > do
> > > > > > on a
> > > > > > > > > day to
> > > > > > > > > > > > day basis and I don't fight the tape. My account is
> > > healthy
> > > > ..
> > > > > > I
> > > > > > > > hope
> > > > > > > > > > > > yours is as well.
> > > > > > > > > > > >
> > > > > > > > > > > > Bob
> > > > > > > > > > > >
> > > > > > > > > > > > At 03:35 AM 12/6/2000 -0500, you wrote:
> > > > > > > > > > > > >Bob,
> > > > > > > > > > > > > I've been a student/investor for many years.
> > > Sounds
> > > > to
> > > > > > me
> > > > > > > > like
> > > > > > > > > > > you've
> > > > > > > > > > > > >become "insulted" that the mob out there doesn't
have
> > > your
> > > > > > > > > intelligence
> > > > > > > > > > > and
> > > > > > > > > > > > >prescience.
> > > > > > > > > > > > >
> > > > > > > > > > > > > Do I detect the burning flesh of an elitist?
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > >To unsubscribe from this group, send an email to:
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> > > > > > > > > > > >
> > > > > > > > > > > >
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> > > > > > > > > > > >
> > > > > > > > > > > >
> > > > > > > > > > > >
> > > > > > > > > > >
> > > > > > > > > > >
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> > > > > > > > >
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