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Dear All,
All these magic combinations, spreads, 4-legs box spreads, etc, look
so wonderful, until the moment you realize that you also have to pay
as much commissions as there are legs in your spread, not to mention
the sometimes amazing bid-offer spread if you order at the market...
Personnally, I prefer to limit the use of options to cover an
existing long position, or to add to my profit on an open stock
position
Carl
--- In realtraders@xxxxxxxxxxx, "Dom Perrino" <domenick@xxxx> wrote:
> If upmove or downmove to close all , you would buy 1 106 call and
buy 1 106
> put Also you would sell 1 105 put and sell 1 107 call .If no move
no order,
> let all expire and keep premium. If you wanted to leg out on upmove
you
> would sell the 107 call and buy the 106 put.and on downmove sell
the 105 put
> and buy the 106 call.. You would make more money if you leg out but
you have
> to have a volatile instrument and you would have to have the orders
in in
> advance. Also keep in mind that you wuold have one uncovered
option ,if you
> leg out, until the other side is closed.. You could also cover the
uncovered
> option with another appropriate option but you would have to
determine if
> the cost would be worth it.
> Dom
> ----- Original Message -----
> From: "Prosper " <brente@xxxx>
> To: <realtraders@xxxxxxxxxxx>
> Sent: Monday, January 15, 2001 7:54 PM
> Subject: [RT] Re: Options question (buy both a bull and bear spread)
>
>
> > Thanks for your help Dom.
> >
> > So I can understand your post better could you state what you
think
> > the order would actually be. IE buy one 106 call and sell a call
at
> > ___ and then buy a 106 put and sell a put at ___.
> >
> > Thanks
> >
> > Prosper
> >
> >
> > --- In realtraders@xxxxxxxxxxx, "Dom Perrino" <domenick@xxxx>
wrote:
> > > Options are very useful instruments. They can be used alone e.g.
> > buy calls
> > > or puts; in conjunction with stock ,futures, or other entities
the
> > can be
> > > used to protect profits, limit losses and many other
strategies. I
> > strongly
> > > recommend reading up on options because of the many uses they
can
> > be put to.
> > > Regarding the particular example first bear in might that would
> > have
> > > resulted in a credit to your account since the sale of the two
> > options
> > > would be greater than the purchase of the other two. If there a
> > sideway move
> > > let all options expire and you keep the original credit . If a
move
> > above
> > > 107 or below 105 you can sell all and the gain on the call
and/or
> > put
> > > should be greater than the loss on any diferrential move on the
put
> > and call
> > > sold. Another thing you can do is to leg out the two winning
> > options on a
> > > swing up and leg out the other two on a downswing. I do not
> > recommend this
> > > because it will leave you with one uncovered option. There are
many
> > creative
> > > ways to use options from the simple to the complex .
> > > P.S. Ira's post gave an example of how option use come to you
> > as your
> > > need for them arises.
> > > Dom ----- Original
> > > Message -----
> > > From: "Prosper " <brente@xxxx>
> > > To: <realtraders@xxxxxxxxxxx>
> > > Sent: Monday, January 15, 2001 1:34 PM
> > > Subject: [RT] Options question (buy both a bull and bear spread)
> > >
> > >
> > > > 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:
> > > > realtraders-unsubscribe@xxxxxxxxxxx
> > > >
> > > >
> > > >
> > > >
> >
> >
> > 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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