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There seems to be the opinion out there that there is some magic in
options. A secret, that if it was only known, would be all things to
all people. I received another e mail from a guy named Crow who is once
again recommending the sale of naked puts as the answer to untold
wealth. Prosper, there are dozens of answers to your question. I will
give one that I just got through using. I had a buy signal on a stock.
With that I also had a target price. when I reached my first price
objective on the way to that target I sold the call at the strike price
just above my target price. When I reached the target price I bought
the put at that strike price to create the conversion and lock in the
profit on that trade. Yes I did give up some profit potential, but now
the money was in my pocket. I also Bought in the call that I had sold
which was for the near month and sold the call for the next month out to
increase my profit potential. I sold the time spread. Time spreads are
greatest at the strike price. If the price retraces, as I believe that
it will, then I will have increased my profit potential in the call
area. When I have my next buy signal, I liquidate the put, hopefully at
a profit, look at my next target and adjust my call position
accordingly. this is just one of hundreds of ways you can utilize
options. Ira
Prosper wrote:
> Hi I have been thinking about Dom's suggestion. Seems that this idea
> may be a good one. How would a person manage the position after
> entering it, for example if the security goes no place but sideways.
> Or if it breaks out stronly one way or the other. Or if there is
> extreem volatility like the spoos have experienced over the last
> year. Thanks for you input and thanks to Dom for suggesting this.
>
> Prosper
>
> --- In realtraders@xxxxxxxxxxx, "dom perrino" <domenick@xxxx> wrote:
> > I beleive that's a vertical spread Something I suggest you might
> toss around
> > that would be more conservative is to consider a bull spread and a
> bear
> > spread at the same time(referred to as a box spread). In your
> example you
> > would sell one 106 call and sell one 106 put. You would also buy
> one 105 put
> > and buy one 107 call. . You have limited risk/limited reward,
> provided you
> > don't leg out of the bull or bear spread seperately.This is based
> on my
> > knowledge as applicable to stocks. I have not traded futures in a
> few years
> > If it works differently on futures someone will correct. There are
> numerous
> > strategies regarding options, some of which are very complex as
> seen here on
> > recent discussions..
> > Happy Holidays
> > Dom
> > ----- Original Message -----
> > From: "Prosper" <brente@xxxx>
> > To: "Real Traders" <realtraders@xxxxxxxxxxx>
> > Sent: Wednesday, December 20, 2000 10:34 PM
> > Subject: [RT] Options question for Ira and other options experts.
> >
> >
> > > Hi,
> > >
> > > I was thinking about an option play that would require that you
> buy one,
> > at
> > > the money put 3 to 6 months out. Then you buy 2 calls out of the
> money by
> > > two strikes. Or vise versa (buying a call and 2 puts). Example,
> buy 1 June
> > > 106 T-Bond call and buy 2 June 102 T-Bond puts.
> > >
> > > I don't know if there is a name for this kind of trade. I would
> like to
> > hear
> > > some of the pros and cons for this idea.
> > >
> > > Thanks,
> > >
> > > Prosper
> > >
> > >
> > >
> > > To unsubscribe from this group, send an email to:
> > > realtraders-unsubscribe@xxxxxxxxxxx
> > >
> > >
> > >
> > >
>
> To unsubscribe from this group, send an email to:
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