Thursday, August 20, 2009

Re: [TheOptionClub.com] Adjusting Spreads

 

Hi Jeff, if you have some extra time and energy at your disposal, please consider going through all the archived messages on this group which were authored by Michael. They are many hidden golden nuggets of information buried in those messages.

I did this about 6 months back and I was extremely pleased with what I found. Given my relatively low IQ level, it took me 2 weeks to go through and analyze all the messages though:-)

As always, you and I don't have to blindly follow Michael's trading style but we can always pick up what we like/dislike and adapt that to suit our individual risk/reward appetite and trading style.



On Thu, Aug 20, 2009 at 9:07 AM, jeff_williamsen <jeff@williamsen.net> wrote:
 

Viky,

Thanks - I am digesting Micahel's document now. Also, GS went above 160 today. If I get too nervous, I will just close it for a smaller profit. This spread was a little tighter than others that I do.

- Jeff W

--- In OptionClub@yahoogroups.com, Viky <vikas.basantani@...> wrote:
>
> Hi Jeff, the only book that I have come across which directly addresses
> adjustments is "The Option Trader Handbook - Strategies and Trade
> Adjustments" by George Jabbour and Phillip Budwick.
>
> Apart from that, Michael C has written a wonderful paper on adjustments that
> is available in the files section of this group.
>
> Coming back to your trade, given that aug expiration is so close, you will
> have to take some chance here....
>
> Have you considered adding (+1 160 P/-2 155 P / -1 150 P) ladder @ 0.20/0.25
> Debit to net into (-1 155 P/-1 150 P). If GS stays above 155 at Aug
> expiration, you may still be able to get out with a little profit. Of
> course, you need to feel comfortable with the downside risk here.
>
> Viky
>
> http://options101.wordpress.com
>
>
>
> On Tue, Aug 18, 2009 at 12:11 AM, jeff_williamsen <jeff@...>wrote:
>
> >
> >
> > I have read many books on trading options. One subject that is rarely
> > covered, if ever, is adjusting a trade. Help me to understand how I can
> > adjust this trade, that may be going bad this week.
> >
> > GS Bull Put Spread
> > STO AUG 160 @ 1.86
> > BTO AUG 155 @ .84
> > Credit 1.02
> >
> > Currently if I were to close
> > BTC AUG 160 @ 3.85
> > STC AUG 155 @ 1.67
> > Debit 2.18
> >
> > I figure my options are to roll down or reverse position. I would like some
> > thoughts from this group, as I am a bit of a beginner on these types of
> > spreads.
> >
> > - Jeff
> >
> >
> >
>


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