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> Why go through your strategy when with his strategy he has an out of the money
> put, takes the profit out of the future and then can trade either the futures
> or the other out of the money puts against his existing put position. After
> he sells the futures he can watch the puts increase in value as the underlying
> goes down in price. Shorting the future against a deep in the money call
> doesn't give much leverage on the downside. You are trading into the postion
> he started with and incurring the same commission. The futures options are
> really illiquid compared to many stock and index options. I would rather be
> long the options in futures and trade the future against them, using the
> option as my stop or safety net rather then try to get in and out of the
> options. I just take the options price and divide it by the number of days
> left to expiration and amortize my insurance policy while trading the
> underlying against it. When there is no more volatility in the underlying I
> would just sell out the options at whatever price because at that point the
> game is over. . .
>
> If you can't get out of a deep in the money call for a reasonable amount,
> short the underlying. You can then, at your convenience, either unwind the
> resulting spread,
> wait for the market to make a big reverse and make more money, or if all
> else fails, exercise your calls to make it all go away. The difference is
> that this way you don't incur extra expenses until toward the end and then
> only if needed. The way you did it, you pay upfront and commit to pay more.
>
> Cheers,
>
> Norman
> > ----- Original Message -----
> > From: "Norman Winski" <nwinski@xxxxxxxxxxxxxxx>
> > To: <realtraders@xxxxxxxxxxxxxxx>
> > Sent: Thursday, November 01, 2001 6:20 PM
> > Subject: Re: [RT] RT:ODDBALL/using options for overnight positions
> >
> >
> > > Prof,
> > >
> > > What's the dif between your stated strategy and buying a call for $5?
> > > Sound to me that you could have simplified and saved some commissions.
> > >
> > > Cheers,
> > >
> > > Norman.
> > >
> > >
> > > ----- Original Message -----
> > > From: "profitok" <profitok@xxxxxxxxxxxxx>
> > > To: <realtraders@xxxxxxxxxxxxxxx>
> > > Sent: Thursday, November 01, 2001 7:16 PM
> > > Subject: Re: [RT] RT:ODDBALL/using options for overnight positions
> > >
> > >
> > > > Hello
> > > >
> > > > AN EXAMPLE IS WHAT JUST HAPPEN IN THE LAST 2 DAYS,, I BOUGHT 4 BIG
> SP
> > > AND
> > > > 4 BIG NASDAQ,, (WHEN SP TRADED 1055-1065)
> > > > AND NASDAQ AT 1360-1370,,)
> > > > AND immediately ALSO BOUGHT 4 SP NOV 1050 PUTS AND NOV 1350 PUT
> > ON
> > > > NASDAQ,,
> > > > WHEN I HAD 20 POINTS PROFIT ON SP500 I SOLD BOTH THE PUTS AND
> > FUTURES
> > > > SAME WITH ND01Z SOLD AT 40 POINT PROFIT AND SOLD PUTS TOO
> > > > THE LOSS ON THE PUTS WAS OVER $5000 but you can figure my net in 2
> > days
> > > > and the beauty is
> > > > when it goes against you your max loss is only 5 points per
> > contract,,
> > > > EVEN sleep good at night,, because you know the most you can loose
> is
> > > ,,,
> > > > ----- Original Message -----
> > > > From: "BobR" <bobrabcd@xxxxxxxxxxxxx>
> > > > To: <realtraders@xxxxxxxxxxxxxxx>
> > > > Sent: Thursday, November 01, 2001 1:30 PM
> > > > Subject: Re: [RT] RT:ODDBALL
> > > >
> > > >
> > > > > Last year when Mark published his article in Active Trader I asked
> him
> > > > about
> > > > > stops, particularly the risk of overnight exposure. He acknowledged
> > the
> > > > > inherent risk, but he also said that was one of its strengths in
> that
> > > the
> > > > > gaps tended to benefit it more so than not. He also emphasized the
> > > basic
> > > > > system was an example of how simple a system could be and yet be
> quite
> > > > > profitable in the long run. Yet, who in the real world can trade
> > > without
> > > > > stops? He also planned followup articles enhancing the system.
> > > > >
> > > > > Since the OddBall system samples hourly during the day session, it
> > > leaves
> > > > > you exposed for an entire hour at a time plus overnight.
> Commissions
> > > are
> > > > > low these days so exiting end of day and re-entering the next day is
> > one
> > > > > option. Another is to put on an option hedge before the close and
> > > taking
> > > > it
> > > > > off the next morning, Ben or IRA could explain the details of this.
> > > Since
> > > > > the Oddball has time filter qualities try using a time based type of
> > > stop.
> > > > > Intraday try using a "multi-timeframe" type of channel. Suppose you
> > are
> > > > > using 3 minute bars and using Charles Johnson's array sampling
> > > > > code(excellent stuff) then create a highest high and lowest low and
> > > > midpoint
> > > > > channel to protect you during that hour long exposure. Twenty bars
> > > would
> > > > be
> > > > > one hour so a midpoint line based on the highest high and lowest low
> > > might
> > > > > be of value. I haven't backtested this with the oddball system, but
> > > have
> > > > > been watching it today. Problem is, the oddball system is optimized
> > for
> > > > > simplicity and additions to the code may detract from its
> performance.
> > > > > That's the tradeoff. Another thing you might try is not taking the
> > > first
> > > > > 9AM ET or 8AM CT trade until another half hour has passed. The
> reason
> > > is
> > > > > the two half hour drives that occur are one source of the whipsaws.
> > > > >
> > > > > plot1(Highest(H,20),"H");
> > > > > plot2(0.5*(Highest(H,20)+Lowest(L,20)),"Mid");
> > > > > plot3(Lowest(L,20),"L");
> > > > >
> > > > > Use the Mid line for a stop and re-entry in the direction of the
> > current
> > > > > Oddball signal.
> > > > >
> > > > > bobr
> > > > >
> > > > >
> > > > > ----- Original Message -----
> > > > > From: "Eliot Kaplan" <eliot@xxxxxxx>
> > > > > To: "RealTraders Mail List" <realtraders@xxxxxxxxxxxxxxx>
> > > > > Sent: Thursday, November 01, 2001 9:53 AM
> > > > > Subject: Re: [RT] RT:ODDBALL
> > > > >
> > > > >
> > > > > > Michael,
> > > > > >
> > > > > > I just started following the Oddball about a week ago, and it has
> > had
> > > > > > 2 great signals (20-30+ point winners), followed just the last day
> > or
> > > > > > so by 2 that were small losers, and today's which remains in
> > process.
> > > > > >
> > > > > > It seems quite remarkable overall.
> > > > > >
> > > > > > I myself am wondering how to trade it using a stop. I can't trade
> it
> > > > > > without one for obvious reasons, and have been considering a 10
> > point
> > > > > > SP emini stop as perhaps wide enough to stay out of it's way. I'm
> > not
> > > > > > a backtester, so I imagine, others have tried to test this, and
> it
> > > > > > would be interesting to hear BobR or others comment on the use of
> > > > > > stops with Oddball.
> > > > > >
> > > > > > Essentially, does a stop ruin it? And what lengths show best
> > results?
> > > > > >
> > > > > > Eliot
> > > > > >
> > > > > >
> > > > > >
> > > > > > >BobR, or anyone following oddball? wonder if it got whipsawed
> > > > yesterday,
> > > > > > >thought $ADV was advertising close on high.
> > > > > > >
> > > > > > >Pretty choppy SP. Looks like expiration. Looks like Earl nailed
> it,
> > > ND
> > > > &
> > > > > SP
> > > > > > >clashing.
> > > > > > >
> > > > > > >
> > > > > > >
> > > > > > >To unsubscribe from this group, send an email to:
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> > > > > > >
> > > > > > >
> > > > > > >
> > > > > > >Your use of Yahoo! Groups is subject to
> > > > http://docs.yahoo.com/info/terms/
> > > > > >
> > > > > >
> > > > > > --
> > > > > > ^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> > > > > > Eliot Kaplan
> > > > > > 20211 Croydon Lane
> > > > > > Topanga, CA 90290
> > > > > > Voice: 310.455.3810
> > > > > > Fax: 310.455.3085
> > > > > > email; eliot@xxxxxxx
> > > > > > web: www.isu.com
> > > > > >
> > > > > >
> > > > > >
> > > > > > To unsubscribe from this group, send an email to:
> > > > > > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> > > > > >
> > > > > >
> > > > > >
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> > > > http://docs.yahoo.com/info/terms/
> > > > > >
> > > > > >
> > > > >
> > > > >
> > > > >
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> > > > >
> > > > >
> > > > >
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> > > > >
> > > >
> > > >
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> > > >
> > > >
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