|
PureBytes Links
Trading Reference Links
|
Hi all,
Here is a chart comparing Ben's trade as described
(in blue) and the spread described by Mike (in red). The graphs are shaped
similarly, but the results are considerably different. If Ben's numbers
are correct he found an excellent trade with the difference in price of the
options bought and sold equal to 2.35. A more typical net would be
about 0.95 to 1.05.
The second chart shows similar trades using today's
prices on March and April options. The blue line represents long 2000
QQQ at 34.37, short 20 March 35 calls @ 1.85, and long 20 Feb 34 put @
1.30 The red line is long 20 March 34
puts at 1.3 and short 20 April 36 puts at 2.95.
All are at expiration of the nearest
option.
Good luck and good trading,
Ray Raffurty
<TABLE style="WIDTH: 946pt; BORDER-COLLAPSE: collapse" cellSpacing=0
cellPadding=0 width=1257 border=0 x:str>
<COL style="WIDTH: 84pt; mso-width-source: userset; mso-width-alt: 4096"
width=112>
<COL style="WIDTH: 52pt; mso-width-source: userset; mso-width-alt: 2523"
width=69>
<COL style="WIDTH: 53pt; mso-width-source: userset; mso-width-alt: 2560"
width=70>
<COL style="WIDTH: 44pt; mso-width-source: userset; mso-width-alt: 2121"
span=2 width=58>
<COL style="WIDTH: 54pt; mso-width-source: userset; mso-width-alt: 2633"
width=72>
<COL style="WIDTH: 58pt; mso-width-source: userset; mso-width-alt: 2816"
width=77>
<COL style="WIDTH: 52pt; mso-width-source: userset; mso-width-alt: 2523"
width=69>
<COL style="DISPLAY: none; mso-width-source: userset; mso-width-alt: 2340"
span=2 width=0>
<COL style="WIDTH: 68pt; mso-width-source: userset; mso-width-alt: 3291"
width=90>
<COL style="DISPLAY: none; mso-width-source: userset; mso-width-alt: 2816"
width=0>
<COL style="WIDTH: 61pt; mso-width-source: userset; mso-width-alt: 2962"
width=81>
<COL style="WIDTH: 67pt; mso-width-source: userset; mso-width-alt: 3254"
width=89>
<COL style="WIDTH: 35pt; mso-width-source: userset; mso-width-alt: 1718"
width=47>
<COL style="WIDTH: 52pt; mso-width-source: userset; mso-width-alt: 2523"
width=69>
<COL style="WIDTH: 78pt; mso-width-source: userset; mso-width-alt: 3803"
width=104>
<FONT
face=Arial size=2>
<A
name=RANGE!B101:B102>qqq
<A
name=RANGE!C101>6
Stock Price
<A
name=RANGE!B102>38.00
Deal Date
<A
name=RANGE!F102:F103>2/15/2002
<TD class=xl43 style="BORDER-RIGHT: red 1pt solid; mso-ignore: colspan"
align=middle colSpan=4>Strategy Comparison
<TD class=xl27 style="mso-ignore: colspan" colSpan=2
x:str="' Days to Expiry:"><SPAN
style="mso-spacerun: yes"> Days to
Expiry:
61
<TD class=xl24
style="WIDTH: 144pt; HEIGHT: 39pt; mso-ignore: colspan-rowspan" width=192
colSpan=3 height=52 rowSpan=3>
<IMG class=shape height=49
v:shapes="_x0000_s5193">
<IMG class=shape height=51
alt="Cycle through time to Expiration"
v:shapes="_x0000_s5201">
Brokerage etc.
(100)
Deal Expiration
<A
name=RANGE!F103>3/15/2002
<TD class=xl27 style="mso-ignore: colspan" colSpan=2
x:str="' Analysis Date:"><SPAN
style="mso-spacerun: yes"> Analysis
Date:
<A
name=RANGE!P103>1/13/2002
Volatility
<TD class=xl28 style="BORDER-TOP: medium none" align=right
x:num="00.35">35.00%
Dividend
<SPAN
style="MARGIN-TOP: 14px; Z-INDEX: 6; MARGIN-LEFT: 84px; WIDTH: 169px; POSITION: absolute; HEIGHT: 26px; mso-ignore: vglayout"><IMG
width=169 v:dpi="96" v:shapes="_x0000_s5213"><SPAN
style="mso-ignore: vglayout2">
<TD class=xl24 style="WIDTH: 68pt; HEIGHT: 12.75pt" width=90
height=17>
Ex date
Price Calculation
Model:
<SPAN
style="MARGIN-TOP: 13px; Z-INDEX: 4; MARGIN-LEFT: 23px; WIDTH: 167px; POSITION: absolute; HEIGHT: 62px; mso-ignore: vglayout">
<IMG class=shape height=26
alt="Clear (Red) Strategy"
v:shapes="_x0000_s5198">
<IMG class=shape height=26
alt="Reset days to maximum"
v:shapes="_x0000_s5194"><SPAN
style="mso-ignore: vglayout2">
<TD class=xl24 style="WIDTH: 48pt; HEIGHT: 12.75pt" width=64
height=17>
Option Trades:
<TD class=xl85 style="BORDER-TOP: medium none; WIDTH: 52pt"
width=69>Action: Buy/Sell
Type
No.
Strike
Implied Volatility
Trade Expiry
<TD class=xl86 style="BORDER-TOP: medium none; WIDTH: 52pt"
width=69>Override Price
voltlty
Expiry
Days to Expiry
Price Used
Calculated Price
Initital Deb/Cred
Delta
Status
Option Trade 1
<A
name=RANGE!B108:H112>b
p
<TD class=xl63 style="BORDER-TOP: medium none" align=right
x:num="2000">2,000
34.00
<TD class=xl76 style="BORDER-TOP: medium none" align=right
x:num="37330">3/15/2002
35.0%
3/15/2002
28
0.199263
0.1993
(399)
-0.11
Out' money
Option Trade 2
s
p
2,000
36.00
4/19/2002
35.0%
4/19/2002
63
1.174268
1.1743
2,349
-0.31
Out' money
<TD class=xl24
style="WIDTH: 144pt; HEIGHT: 25.5pt; mso-ignore: colspan-rowspan" width=192
colSpan=3 height=34 rowSpan=2>
<IMG class=shape height=26 alt="Reset days to minimum"
v:shapes="_x0000_s5196">
Option Trade 3
35.0%
3/15/2002
<TD class=xl24 style="COLOR: white; mso-ignore: style" align=right
x:num>9999
Option Trade 4
35.0%
3/15/2002
<TD class=xl24 style="COLOR: white; mso-ignore: style" align=right
x:num>9999
<TD class=xl24
style="WIDTH: 144pt; HEIGHT: 39pt; mso-ignore: colspan-rowspan" width=192
colSpan=3 height=52 rowSpan=3>
<IMG class=shape height=26 alt="Switch to table view"
v:shapes="_x0000_s5370">
Option Trade 5
35.0%
3/15/2002
<TD class=xl24 style="COLOR: white; mso-ignore: style" align=right
x:num>9999
1,950
Stock Trades:
Action: Buy/Sell
<SPAN
style="mso-spacerun: yes"> No. Shares
<SPAN
style="mso-spacerun: yes"> Price
<SPAN
style="MARGIN-TOP: 4px; Z-INDEX: 9; MARGIN-LEFT: 109px; WIDTH: 506px; POSITION: absolute; HEIGHT: 77px; mso-ignore: vglayout">
<SPAN
style="MARGIN-TOP: 12px; Z-INDEX: 12; MARGIN-LEFT: 11px; WIDTH: 134px; POSITION: absolute; HEIGHT: 31px; mso-ignore: vglayout"><IMG
class=shape height=31 alt="Absolute Price"
v:shapes="_x0000_s5346"><SPAN
style="MARGIN-TOP: 0px; Z-INDEX: 13; MARGIN-LEFT: 10px; WIDTH: 232px; POSITION: absolute; HEIGHT: 73px; mso-ignore: vglayout"><IMG
class=shape height=73 alt="Show stock price as "
v:shapes="_x0000_s5347"><SPAN
style="MARGIN-TOP: 43px; Z-INDEX: 14; MARGIN-LEFT: 11px; WIDTH: 212px; POSITION: absolute; HEIGHT: 24px; mso-ignore: vglayout"><IMG
class=shape height=24 alt="Percent Change from current price"
v:shapes="_x0000_s5348"><IMG height=77
v:shapes="_x0000_s5363 _x0000_s5344 _x0000_s5362">
<IMG class=shape height=30
alt="Include funding cost/revenue in P&L"
v:shapes="_x0000_s5342">
<SPAN
style="mso-ignore: vglayout2">
<TD class=xl27 style="WIDTH: 84pt; HEIGHT: 12.75pt" width=112
height=17>Stock Trade 1
<A
name=RANGE!B115:D116>
38
Stock Trade 2
38
38
<SPAN
style="MARGIN-TOP: 4px; MARGIN-LEFT: 8px; WIDTH: 998px; POSITION: absolute; HEIGHT: 366px; mso-ignore: vglayout"><IMG
width=998 v:dpi="96" v:shapes="_x0000_s5158"><SPAN
style="mso-ignore: vglayout2">
<TD class=xl24 style="WIDTH: 84pt; HEIGHT: 13.5pt" width=112
height=18>
<TD class=xl24
style="WIDTH: 174pt; HEIGHT: 51.75pt; mso-ignore: colspan-rowspan" width=232
colSpan=3 height=69 rowSpan=4>
<IMG class=shape height=47 alt="Switch to Main Screen"
v:shapes="_x0000_s5285">
<TABLE style="WIDTH: 946pt; BORDER-COLLAPSE: collapse" cellSpacing=0
cellPadding=0 width=1257 border=0 x:str>
<COL style="WIDTH: 84pt; mso-width-source: userset; mso-width-alt: 4096"
width=112>
<COL style="WIDTH: 52pt; mso-width-source: userset; mso-width-alt: 2523"
width=69>
<COL style="WIDTH: 53pt; mso-width-source: userset; mso-width-alt: 2560"
width=70>
<COL style="WIDTH: 44pt; mso-width-source: userset; mso-width-alt: 2121"
span=2 width=58>
<COL style="WIDTH: 54pt; mso-width-source: userset; mso-width-alt: 2633"
width=72>
<COL style="WIDTH: 58pt; mso-width-source: userset; mso-width-alt: 2816"
width=77>
<COL style="WIDTH: 52pt; mso-width-source: userset; mso-width-alt: 2523"
width=69>
<COL
style="DISPLAY: none; mso-width-source: userset; mso-width-alt: 2340"
span=2 width=0>
<COL style="WIDTH: 68pt; mso-width-source: userset; mso-width-alt: 3291"
width=90>
<COL
style="DISPLAY: none; mso-width-source: userset; mso-width-alt: 2816"
width=0>
<COL style="WIDTH: 61pt; mso-width-source: userset; mso-width-alt: 2962"
width=81>
<COL style="WIDTH: 67pt; mso-width-source: userset; mso-width-alt: 3254"
width=89>
<COL style="WIDTH: 35pt; mso-width-source: userset; mso-width-alt: 1718"
width=47>
<COL style="WIDTH: 52pt; mso-width-source: userset; mso-width-alt: 2523"
width=69>
<COL style="WIDTH: 78pt; mso-width-source: userset; mso-width-alt: 3803"
width=104>
<TD class=xl24 style="WIDTH: 84pt; HEIGHT: 12.75pt" width=112
height=17>
<A
name=RANGE!A101>Deal Details:
qqq
6
Stock Price
<TD class=xl49 style="BORDER-TOP: medium none" align=right
x:num="34.37">34.37
Deal Date
<A
name=RANGE!F102:F103>2/19/2002
<TD class=xl43
style="BORDER-RIGHT: red 1pt solid; mso-ignore: colspan" align=middle
colSpan=4>Strategy Comparison
<TD class=xl27 style="mso-ignore: colspan" colSpan=2
x:str="' Days to Expiry:"><SPAN
style="mso-spacerun: yes"> Days to
Expiry:
61
<TD class=xl24
style="WIDTH: 144pt; HEIGHT: 39pt; mso-ignore: colspan-rowspan"
width=192 colSpan=3 height=52 rowSpan=3><SPAN
style="mso-ignore: vglayout">
<IMG class=shape height=49
v:dpi="96" v:shapes="_x0000_s5193">
<IMG class=shape height=51
alt="Cycle through time to Expiration"
v:dpi="96" v:shapes="_x0000_s5201">
Brokerage etc.
<A
name=RANGE!B103>(100)
Deal
Expiration
<A
name=RANGE!F103>4/19/2002
<TD class=xl27 style="mso-ignore: colspan" colSpan=2
x:str="' Analysis Date:"><SPAN
style="mso-spacerun: yes"> Analysis
Date:
<A
name=RANGE!P103>2/17/2002
Volatility
<TD class=xl28 style="BORDER-TOP: medium none" align=right
x:num="00.35">35.00%
Dividend
<SPAN
style="MARGIN-TOP: 14px; Z-INDEX: 6; MARGIN-LEFT: 84px; WIDTH: 169px; POSITION: absolute; HEIGHT: 26px; mso-ignore: vglayout"><IMG
width=169 v:dpi="96" v:shapes="_x0000_s5213"><SPAN
style="mso-ignore: vglayout2">
<TD class=xl24 style="WIDTH: 68pt; HEIGHT: 12.75pt" width=90
height=17>
Ex date
Price
Calculation Model:
<SPAN
style="MARGIN-TOP: 13px; Z-INDEX: 4; MARGIN-LEFT: 23px; WIDTH: 167px; POSITION: absolute; HEIGHT: 62px; mso-ignore: vglayout">
<IMG class=shape height=26
alt="Clear (Red) Strategy"
v:dpi="96" v:shapes="_x0000_s5198">
<IMG class=shape height=26
alt="Reset days to maximum"
v:dpi="96"
v:shapes="_x0000_s5194"><SPAN
style="mso-ignore: vglayout2">
<TD class=xl24 style="WIDTH: 48pt; HEIGHT: 12.75pt" width=64
height=17>
Option Trades:
<TD class=xl85 style="BORDER-TOP: medium none; WIDTH: 52pt"
width=69>Action: Buy/Sell
Type
No.
Strike
Implied Volatility
Trade Expiry
<TD class=xl86 style="BORDER-TOP: medium none; WIDTH: 52pt"
width=69>Override Price
voltlty
Expiry
Days to Expiry
Price Used
Calculated Price
Initital Deb/Cred
Delta
Status
Option Trade 1
<A
name=RANGE!B108:H112>b
p
<TD class=xl63 style="BORDER-TOP: medium none" align=right
x:num="2000">2,000
<TD class=xl53 style="BORDER-TOP: medium none" align=right
x:num>34.00
<TD class=xl76 style="BORDER-TOP: medium none" align=right
x:num="37330">3/15/2002
1.3
35.0%
3/15/2002
24
1.3
0.9983
(2,600)
-0.42
Out' money
Option Trade 2
s
p
2,000
36.00
4/19/2002
2.95
35.0%
4/19/2002
59
2.95
2.7277
5,900
-0.59
In' money
<TD class=xl24
style="WIDTH: 144pt; HEIGHT: 25.5pt; mso-ignore: colspan-rowspan"
width=192 colSpan=3 height=34 rowSpan=2><SPAN
style="mso-ignore: vglayout">
<IMG class=shape height=26 alt="Reset days to minimum"
v:dpi="96" v:shapes="_x0000_s5196">
Option Trade 3
35.0%
4/19/2002
<TD class=xl24 style="COLOR: white; mso-ignore: style" align=right
x:num>9999
Option Trade 4
35.0%
4/19/2002
<TD class=xl24 style="COLOR: white; mso-ignore: style" align=right
x:num>9999
<TD class=xl24
style="WIDTH: 144pt; HEIGHT: 39pt; mso-ignore: colspan-rowspan"
width=192 colSpan=3 height=52 rowSpan=3><SPAN
style="mso-ignore: vglayout">
<IMG class=shape height=26 alt="Switch to table view"
v:dpi="96" v:shapes="_x0000_s5370">
Option Trade 5
35.0%
4/19/2002
<TD class=xl24 style="COLOR: white; mso-ignore: style" align=right
x:num>9999
3,300
Stock Trades:
Action: Buy/Sell
<SPAN
style="mso-spacerun: yes"> No. Shares
<SPAN
style="mso-spacerun: yes"> Price
<SPAN
style="MARGIN-TOP: 4px; Z-INDEX: 9; MARGIN-LEFT: 109px; WIDTH: 506px; POSITION: absolute; HEIGHT: 77px; mso-ignore: vglayout">
<SPAN
style="MARGIN-TOP: 12px; Z-INDEX: 12; MARGIN-LEFT: 11px; WIDTH: 134px; POSITION: absolute; HEIGHT: 31px; mso-ignore: vglayout"><IMG
class=shape height=31 alt="Absolute Price"
v:dpi="96" v:shapes="_x0000_s5346"><SPAN
style="MARGIN-TOP: 0px; Z-INDEX: 13; MARGIN-LEFT: 10px; WIDTH: 232px; POSITION: absolute; HEIGHT: 73px; mso-ignore: vglayout"><IMG
class=shape height=73 alt="Show stock price as "
v:dpi="96" v:shapes="_x0000_s5347"><SPAN
style="MARGIN-TOP: 43px; Z-INDEX: 14; MARGIN-LEFT: 11px; WIDTH: 212px; POSITION: absolute; HEIGHT: 24px; mso-ignore: vglayout"><IMG
class=shape height=24 alt="Percent Change from current price"
v:dpi="96" v:shapes="_x0000_s5348"><IMG height=77
v:shapes="_x0000_s5363 _x0000_s5344 _x0000_s5362">
<IMG class=shape height=30
alt="Include funding cost/revenue in P&L"
v:dpi="96" v:shapes="_x0000_s5342">
<SPAN
style="mso-ignore: vglayout2">
<TD class=xl27 style="WIDTH: 84pt; HEIGHT: 12.75pt" width=112
height=17>Stock Trade 1
<A
name=RANGE!B115:D116>
34.37
Stock Trade 2
34.37
34.37
<SPAN
style="MARGIN-TOP: 4px; MARGIN-LEFT: 8px; WIDTH: 998px; POSITION: absolute; HEIGHT: 366px; mso-ignore: vglayout"><IMG
width=998 v:dpi="96" v:shapes="_x0000_s5158"><SPAN
style="mso-ignore: vglayout2">
<TD class=xl24 style="WIDTH: 84pt; HEIGHT: 13.5pt" width=112
height=18>
<TD class=xl24
style="WIDTH: 174pt; HEIGHT: 51.75pt; mso-ignore: colspan-rowspan"
width=232 colSpan=3 height=69 rowSpan=4><SPAN
style="mso-ignore: vglayout">
<IMG class=shape height=47 alt="Switch to Main Screen"
v:dpi="96" v:shapes="_x0000_s5285">
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
<A title=MikeSuesserott@xxxxxxxxxxx
href="mailto:MikeSuesserott@xxxxxxxxxxx";>MikeSuesserott@xxxxxxxxxxx
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, February 19, 2002 12:31
PM
Subject: [RT] Selling Covered Calls
Ira,I am so glad to hear that you were able to
retire early (I was, too), andthat you believe you understand
options.Unfortunately, your analysis is still totally wrong. Ben's
original positionis indeed equivalent to a calendar spread, and
furthermore, risk is totallylimited here.To prove this, please
find attached two charts. The first one, ben.gif,shows Ben's position as
originally indicated by him. The second chart showsthe equivalent calendar
spread. If you were to superimpose them, you wouldfind them exactly
congruent.You may also notice that there is no unlimited risk, and
that the greatestprofit potential is to the
upside.Regards,Michael Suesserott>
-----Ursprungliche Nachricht-----> Von: Ira Tunik
[mailto:irat@xxxxxxxxx]> Gesendet: Tuesday, February 19, 2002
17:31> An: realtraders@xxxxxxxxxxxxxxx> Betreff: Re: [RT]
Selling Covered Calls>>> Reread what I wrote. I
didn't say he should fear anything. He> actually put on> a
collar of sorts for a credit. using the 34 puts and the 36> calls
to net a> profit. His maximum risk is 1 3/4 to the downside with
2.40> income. net profit> at 0 on the stock is 2.40-1 3/4. On
the upside he makes 1 point> on the stock> plus the 2.40 in
premium less the cost of the put. Having been a> market
maker,> trading my own account and able to retire 17 years ago, I think
I> understand> options. Ira>>
MikeSuesserott@xxxxxxxxxxx wrote:>> > Ira,>
>> > your argument is in error. In Ben's original position,
being> long 2000 QQQ,> > why should he fear that position to
go to 100?> >> > Even if the stock were called away early,
it would mean for Ben to have> > realized his profit sooner, and to
still own the long puts.> >> > The equivalence of the two
positions is a mathematical fact. Just do the> > math or feed the
positions into some option software, and you'll see for> >
yourself.> >> > Regards,> >> > Michael
Suesserott> >> > > -----Ursprungliche
Nachricht-----> > > Von: Ira Tunik
[mailto:irat@xxxxxxxxx]> > > Gesendet: Tuesday, February 19, 2002
16:53> > > An: realtraders@xxxxxxxxxxxxxxx> > >
Betreff: Re: [RT] Selling Covered Calls> > >> >
>> > > 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> > > > > >> > >
> > >> > > > > >> > > > >
> To unsubscribe from this group, send an email to:> > > >
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx> > > > >
>> > > > > >> > > > > >>
> > > > > Your use of Yahoo! Groups is subject to> >
> > <A
href="http://docs.yahoo.com/info/terms/";>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>
> <A
href="http://docs.yahoo.com/info/terms/";>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<A
href="http://docs.yahoo.com/info/terms/";>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 <A
href="http://docs.yahoo.com/info/terms/";>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 <A
href="http://docs.yahoo.com/info/terms/";>http://docs.yahoo.com/info/terms/To
unsubscribe from this group, send an email
to:realtraders-unsubscribe@xxxxxxxxxxxxxxxYour use of
Yahoo! Groups is subject to <A
href="http://docs.yahoo.com/info/terms/";>http://docs.yahoo.com/info/terms/To
unsubscribe from this group, send an email
to:realtraders-unsubscribe@xxxxxxxxxxxxxxxYour
use of Yahoo! Groups is subject to the <A
href="http://docs.yahoo.com/info/terms/";>Yahoo! Terms of Service.
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: "Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service."
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: "realtraders-unsubscribe@xxxxxxxxxxxxxxx"
Attachment:
Description: "To unsubscribe from this group, send an email to:"
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: "ADVERTISEMENT"
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: "Yahoo! Groups Sponsor"
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
Attachment:
Description: ""
|