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You are correct unless your commission structure allows you to , many of
these strategies are not really feasible. there are several houses that
have relatively low commissions. Ira
Carl Vanhaesendonck wrote:
> 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:
> realtraders-unsubscribe@xxxxxxxxxxx
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