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Once again it all depends on what the option buy
was for. You bought options to use in an outside combination.
You took in your shorts and left the longs to spread against again after the
movement of the underlying. That is the problem with general
statements. When things are taken out of context or not completely
defined.
What about buying options as a surrogate for the
underlying. You are a lot better off buying an option that is 5 points in
the money then the underlying at $95, $150 or $300. There are reasons to
short options and there are reasons to be long options. There are methods
to do each profitably. Once again knowledge is power only if you know how
to use it.
Ira.
----- Original Message -----
Sent: Sunday, July 10, 2005 11:40
AM
Subject: Re: [RT] OPTIONS: Predicting
Liquidity
Dave
before you start trading options,
make believe
the money you are about to trade is LAS VEGAS money
in all the years of
trading I found that option buying is only 20% success
option selling is
80% success
Ben
----- Original Message -----
From: "Dave" <trading83@xxxxxxxxxxx>
To:
<realtraders@xxxxxxxxxxxxxxx>
Sent:
Sunday, July 10, 2005 1:30 PM
Subject: [RT] OPTIONS: Predicting
Liquidity
> Hello,
>
> I am going to trade options
that are close to at-the-money with 30-60 days
> to expiration. If
price movements are not positive, I will sell 10-20
> days
>
before expiration.
>
> With that objective in mind, what is the
best way of estimating which
> options are likely to have enough trading
liquidity to be able to exit the
> trade in the timeframes above?
Are there any rules of thumb, calculations
> or past experience
indicators that work well?
>
> Thanks in advance - Dave
>
Trading83@xxxxxxxxxxx
>
>
>
>
>
> Yahoo!
Groups
Links
>
>
>
>
>
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