|
PureBytes Links
Trading Reference Links
|
Hello
this was just an example
the real was in Feb. I bought 2000 at 38
sold march 39 at 3.1
bought the Feb. 37 at .75
----- Original Message -----
From: "Daniel Goncharoff" <thegonch@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Tuesday, February 19, 2002 10:40 AM
Subject: Re: [RT] Selling Covered Calls
> Ben
>
> Who's you broker? I can't find those prices.
>
> I see: QQQ@xxxxx, April 36 calls @ 1.85-1.90, March 34 puts @.90-.95
>
> At these prices, I can't see how you make money. For example, if market
> stays flat for the next month, you lose 0.95 on the put, and gain only
> 0.75 on the calls (March 36 @1.05-1.10) for a net loss of 0.2.
>
> If you meant to sell the April 35 calls @2.35-2.45, then you get rough
> the same result (March 35 @1.50-1.55).
>
> What am I missing?
>
> Regards
> DanG
>
> profitok wrote:
> >
> > 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
> > >
> > >
> > >
> > > To unsubscribe from this group, send an email to:
> > > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> > >
> > >
> > >
> > > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
> > >
> > >
> >
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
>
>
> To unsubscribe from this group, send an email to:
> realtraders-unsubscribe@xxxxxxxxxxxxxxx
>
>
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
>
>
------------------------ Yahoo! Groups Sponsor ---------------------~-->
Get your FREE credit report with a FREE CreditCheck
Monitoring Service trial
http://us.click.yahoo.com/ACHqaB/bQ8CAA/ySSFAA/zMEolB/TM
---------------------------------------------------------------------~->
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
|