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Dan,
you're right. Typo, sorry, I wrote this between two trades.
I'll write something later to explain this so Ira can perhaps understand it.
Regards,
Michael
> -----Ursprungliche Nachricht-----
> Von: Daniel Goncharoff [mailto:thegonch@xxxxxxxxxx]
> Gesendet: Tuesday, February 19, 2002 17:20
> An: realtraders@xxxxxxxxxxxxxxx
> Betreff: Re: [RT] Selling Covered Calls
>
>
> Well, it is a time spread, but not as described. More like
>
> sell 20 April 36 puts
> buy 20 March 34 puts
>
> Regards
> DanG
>
> Ira Tunik wrote:
> >
> > Wrong. You do not have a calander spread, you have unlimited
> risk. to the
> > upside. The stock is the protection against the stock going to
> infinity. Look
> > at where you are with the stock at 100 and then tell me you
> have a time spread.
> > Ira.
> >
> > MikeSuesserott@xxxxxxxxxxx wrote:
> >
> > > Ben,
> > >
> > > your position is equivalent to a calendar spread
> > > buy 20 March 34 Puts
> > > sell 20 April 36 calls
> > >
> > > You'd get the same risk/reward characteristics without having
> to tie up
> > > capital in the purchase of the QQQ stock.
> > >
> > > Regards,
> > >
> > > Michael Suesserott
> > >
> > > > -----Ursprungliche Nachricht-----
> > > > Von: profitok [mailto:profitok@xxxxxxxxxxxxx]
> > > > Gesendet: Tuesday, February 19, 2002 16:25
> > > > An: realtraders@xxxxxxxxxxxxxxx
> > > > Betreff: Re: Re[2]: [RT] Selling Covered Calls
> > > >
> > > >
> > > > maybe an example will make everyone happy
> > > >
> > > > buy 2000 qqq at 35
> > > > sell 20 April 36 calls at 2.4
> > > > buy 20 march 34 at .75
> > > > ----- Original Message -----
> > > > From: "TheQuant" <thequant@xxxxxxxxx>
> > > > To: "Daniel Goncharoff" <realtraders@xxxxxxxxxxxxxxx>
> > > > Sent: Monday, February 18, 2002 8:53 PM
> > > > Subject: Re[2]: [RT] Selling Covered Calls
> > > >
> > > >
> > > > > Hello Daniel,
> > > > >
> > > > > Tuesday, February 19, 2002, 5:38:35 AM, you wrote:
> > > > >
> > > > > DG> When was selling covered calls (which is indeed
> similar to selling
> > > > > DG> puts) discussed?
> > > > >
> > > > > I went back and re-read his post you are correct. However I have
> > > > > trouble understanding the method. He sells calls, then
> understands
> > > > > the risk so he sells tons of puts. Did he also have tons
> of calls or
> > > > > a half a ton of calls. I think he has been lucky for 7 months?
> > > > > What's the exact method or is it seat of the pants?
> Besides that Ric
> > > > > brings up some very interesting points about the whole
> thing and read
> > > > > Tom Bowen's most recent post. Especially the part about
> the audited
> > > > > (independently)track record. If I only had a nickle for
> every bright
> > > > > star that has claimed to have made "Tons of Money" trading.
> > > > >
> > > > > DG> I thought Ben was talking about a strategy that was
> more like a
> > > > > DG> collar, if I understood it correctly. It seems to me
> that Ben's
> > > > > DG> strategy is based on differences between real price
> movements and
> > > > > DG> the pricing of options, which is usually done on the basis of
> > > > > DG> probabilistic models. Whether you believe it works or not, his
> > > > > DG> downside is limited, which makes it look a lot
> different than a
> > > > > DG> naked short put -- more like a bull put spread.
> > > > >
> > > > > Bunk his downside is limited!, the way the post reads he
> had more puts
> > > > > bought "Tons" then calls. Either way he could have lost
> on the trade,
> > > > > contrary his broker is smiling.
> > > > >
> > > > > DG> Regards
> > > > > DG> DanG
> > > > >
> > > > > What Ric writes below is an eye opener! He is absolutely correct!
> > > > > People can get crazy I tell you trying to avoid risk but rather
> > > > > causing self fulfilled prophecy of doom upon themselves!
> > > > >
> > > > > DG> ric ingram wrote:
> > > > > >>
> > > > > >> Hi,
> > > > > >>
> > > > > >> But some people have a real perception problem - and
> do not know it.
> > > > > >>
> > > > > >> It is only reasonable to point out that given that you
> intend to hold
> > > > the
> > > > > >> underlying, selling a covered call actually reduces your
> > > > exposure to a
> > > > big
> > > > > >> fall. So if you were going to hold the underlying
> anyway, selling
> > > > covered
> > > > > >> calls can be considered a conservative strategy.
> > > > > >>
> > > > > >> However if you do not hold the underlying or do hold
> it but do not
> > > > intend
> > > > > >> to keep it, buying the underlying and selling a
> covered call is the
> > > > same as
> > > > > >> selling a naked put.
> > > > > >>
> > > > > >> Paradoxically, selling naked puts is actually lower
> risk than holding
> > > > the
> > > > > >> underlying if you allocate the same capital as you would
> > > > have done for
> > > > > >> holding the underlying.
> > > > > >>
> > > > > >> But rationality is rarely a bedfellow with fear or greed.
> > > > > >>
> > > > > >> Unconditionally yours, Ric.
> > > > > >> www.traderscalm.com
> > > > >
> > > > >
> > > > > --
> > > > > Best regards,
> > > > > TheQuant mailto:thequant@xxxxxxxxx
> > > > >
> > > > >
> > > > >
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