|
PureBytes Links
Trading Reference Links
|
IMHO for a good risk/reward ratio:
Bear(Long) Put Spreads using NDX/DJX/OEX options
Buy x June puts @ price with strike price near market
Sell x June puts @ lower price with strike price much under market
Caveat:
1) premium decay over time will reduce profit potential if position is held
a long time
2) profit potential is "capped"...so if you are REALLY right, you only get
partially rewarded
So, with this strat, if you are almost right or really wrong, you lose the
difference in premium paid vs. sold premium;
if you are right, you win some....depending on the depth of the drop
if you are really right, you only win the delta in strike prices
> -----Original Message-----
> From: Marc Lawrence [mailto:mhl7@xxxxxxxxx]
> Sent: Friday, April 19, 2002 8:14 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: [RT] trading question
>
>
> Hello all,
>
> It looks like the market will have a little run into
> May- June area and then it looks like we may be in for
> a fall. Additionally there a preponderance of
> overbought sectors- sentiment indicators also show
> more bullishness.
>
> My question is this. How would traders on the list
> look to profit on shorting the market indices S&P and
> Nasdaq?
>
> There are many vehicles QQQ, futures, rydex short
> funds. There are also a number of option strategies
> that could be employed here. I am specifically
> interested in stimulating discussion on which
> strategies have the best possible risk-reward for
> placing such a directional bet.
>
> I know it's a broad question but I am interested in
> how traders on this list would approach this.
>
> Thanks in advance,
>
> Marc
>
>
> __________________________________________________
> Do You Yahoo!?
> Yahoo! Tax Center - online filing with TurboTax
> http://taxes.yahoo.com/
>
>
> 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 ---------------------~-->
Buy Stock for $4
and no minimums.
FREE Money 2002.
http://us.click.yahoo.com/k6cvND/n97DAA/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/
|