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Comments were appreciated but I do not think we are on the same page.
1. Covered calls are on long term holds for me which I would get out
of at a price...
2. The uncovered calls and puts to me are not in the same category as
options on commodities which for the most part have high betas...plus
fundamentals on commodities are not as accurate in my opinion.My
precept was that if my commodity mentor could do it with Feeder
cattle then I could make it even safer with stocks.
3, I do not even consider the Greeks... I like it simple.
4. I am not doing puts and calls on the same stock so there is no
need for sophistication...
5. I believe my criteria will work in an up or down market and in a
side way market with even more certainty.
6. The stocks you mention would have never past my screens.
Hey, if I am wrong...I will lose some money. So far, a year of paper
trades and 6 months of walking forward have been OK.
I will need to study your comments further...what you got was first
blush.
Sincerely,
John
------------------ Reply Separator --------------------
Originally From: rremaa <rremaa@xxxxxxxxx>
Subject: Re: [RT] ClydeTime projections/TA/Opinions
Date: 01/05/2003 11:51am
some comments below.
--- John Cappello <jvc689@xxxxxxx> wrote:
> Dear Ira,
>
> Yes it is opinions that make a horse race but some are more
educated
> opinions than others...mudders and all that. Clyde usually expects
> his readers to know both sides of that coin, correctly so.
>
> Now here is one for you. I have read many "experts" regarding
options
> and the prevailing wisdom appears to be that the seller of the
option
> is the one who usually makes the money...forget about protection
for
> now. The questions:
>
> 1.Are we talking about the market maker in this scenario? If so
when
> he sells to me at the bid, he should not lose because he likely
takes
> an edge on his sell side.
>
> 2. When I sell to the market maker, I believe that I have the edge
> because of the scenarios I pick...out of the money, low PE's, low
> beta,certain lows not being taken out with bad news, chart bottom,
> time decay of option all of which are in my favor when selling
> uncovered Puts. Plus I can buy my way out of disasters.
>
> 3. When selling uncovered calls, which I have just instituted on a
> larger scale, I am now looking at out of the money, low betas,
highs
> not taken out in 2 to 5 years and high PE's along with chart
> agreement, etc above. My goal will be to balance my Put and Call
book
> but not on the same equity.[you are hedged slightly but each
individual position trades in its
own range. If you trade Lean Hogs and Pork Bellies, and you are short
PB calls and Long LH calls,
for argument's sake, and PB gains and LH drops, you lose on both
ends, double-whammy. That is why
they have inter-market spread instruments]
>
> 4. Ay any point, I can also take a profit prior to
expiration...which
> I have done. [depends on theta loss of the sold option, the
delta/gamma gain of how far it has
moved from where you have sold the short strike]
>
> 4. It is impossible to lose selling a covered call above the price
> you paid for the stock. [what if the stock collapses? do you have a
collar on? if you do,
you do not make much on the trade?]
>
> I learned these techniques from a cattle feeder trader who sells
out
> of the money options and makes his money by keeping the premium
with
> expiration. He loses about one in one hundred.It just took me a
while
> to paper trade for a year to see that ratio of losses to wins would
> be with stock options.[one big loser eats away a lot of small
winners. you win 15 out of 20
times and let's say you are short gold calls at 300 and gold moves 20
points in a day, you have
given a lot of your profits back. Risk/reward ratio of short options
trading is always inverted,
limited reward, max risk, unless you institute very serious stop loss
discipline]
>
> I am finding that the opportunities abound in this field and it
does
> not fly in the face of conventional wisdom as I once
thought...times
> change as do strategies. I find for every hour I spend on
researching
> these scenarios that I can put on from $500 to $1000 worth of
options
> per day. I have been careful not to go at that pace yet...but it is
> out there. So my new game plan is that for every uncovered put I
sell
> I will also try to sell one uncovered call...and to extend to $5000
> per month premium vs $3000 to $4000. [if you sell the same strike,
what you have now is a short
strangle, so you have unlimited risk on both end. If you sell a
higher strike, you have a short
straddle and the risk is now buffered by the difference in the strike
prices. With the way
commodities have been this year, the risks are huge. Who would have
thought, treasuries will trade
to 114, gold to 351, crude to 33, beans to 6 bucks, wheat to
4.20,cocoa to 2400,etc. the list is
endless. You can extend the analysis to stocks as well, INKT above
100, now 1 buck, Ariba 400 now
2 bucks and so on.]
>
> I consider you the Maestro and welcome any comments, scathing or
> otherwise.
>
> John
>
>
>
> ------------------ Reply Separator --------------------
> Originally From: "ira" <mr.ira@xxxxxxxxxxxxx>
> Subject: Re: [RT] ClydeTime projections
> Date: 01/04/2003 09:07pm
>
>
> This is very good but can you tell me whether that low will be 100
> points
> higher or lower then where we are today or at exactly the same
level
> as we
> are today. A low is just a point that is lower the previous
bar
> and the
> following bar. The point that I am trying to make is if there is a
> 500
> point rally and it backs off 200 points you have low, but you are
> still 300
> points above where you are now. Trade what the chart and your
> system tell
> you and let the low come. It could be a 400 point drop on the last
> day of
> the cycle.
> ----- Original Message -----
> From: <SLAWEKP@xxxxxxx>
> To: <REALTRADERS@xxxxxxxxxxxxxxx>
> Sent: Saturday, January 04, 2003 6:06 PM
> Subject: [RT] ClydeTime projections
>
>
> > Rt.,
> > here is my observation with few traders after interview with Arch
> Crawford
> > on CNBC when he named mid February as a baaaaad date for stocks.
As
> Clyde
> Lee
> > has strong date for Feb 14th
> >
> > slawek
> >
> > >Did not listen but apparently he said baaaad date mid February.
> >
> > I found from cycles good relation for Mid Feb low.
> >
> > first US dollar has low on intermediate medium & long term
cycles,
> >
> > then applying James Brock Of Triad & Puetz 25.8 month cycle
> > (all weekly dates)
> >
> > 12/23/2000 low + 25.8 months = Feb 15 2003
> >
> > 10/10/98 low + 51.6 months (2X25.6) = 2-01-03
> >
> > 9-6-96 low + 77.4 (3X25.6) = 2-15-03
> >
> > 7-2-94 low + 103.2 (4X25.6) = 2-15-03
> >
> >
> > 9-22-01 low + 16.8 month (16 month cycle) = 2-15-03
> >
> > 5-11-02 low + 9.2 months (9 months cycle) = 2-15-03
> >
> > there is short term cycle running 27 to 32 trading days from low
to
> low
> >
> > last 11-13-02 low + 32 = 12-31-02 low + 32 trading days = 2-14 -
03
> low
> >
> > all points its should be a low
> > if we use last trading cycle low on 11-13 to top 12-2 & repeat on
> this
> cycle,
> > then expect top around 1-17-03 before we start going down to mid
> Feb date
> >
> > 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:
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>
>
>
> Your use of Yahoo! Groups is subject to
> http://docs.yahoo.com/info/terms/
>
>
>
>
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