Sunday, August 16, 2009

[TheOptionClub.com] Re: RUT trade question

 

The mid price on the spread was $17.05 when I looked at it, and there was more than ten of these type of trades in the spread book so I am assuming these were trades that were STO's. But you're right, you dont know if someone was getting out! It just looked very interesting putting on a trade with a potential of a 57% return so close to expiration. As Viky pointed out in his post, with a couple of adjustment ideas, this looks like a trades that you have to babysit for a few days but the potential return could be well worth it.

Thanks!

Rich

--- In OptionClub@yahoogroups.com, "Jack" <jack@...> wrote:
>
> There is no way to tell if it ever got 'executed'. Also, we do not know if
> it was a STO or a STC. :-) Someone might own that Condor and be trying to
> get out of it. :-(
>
>
>
> _____
>
> From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
> Behalf Of bben1006
> Sent: Saturday, August 15, 2009 3:54 PM
> To: OptionClub@yahoogroups.com
> Subject: [TheOptionClub.com] Re: RUT trade question
>
>
>
>
>
> Are you sure that this trade was executed--or it meeky was listed in the
> speardbook of the TOS (as someone is offering it for a sale)?
>
> --- In OptionClub@yahoogro <mailto:OptionClub%40yahoogroups.com> ups.com,
> "foo.bar28" <Carllr@> wrote:
> >
> > TOS allows you to look at other trades that are working and I saw an
> interesting trade. Actually there were several similar ones so it probably a
> strat that someone has taught. Here's the trade: This was Tuesday and the
> RUT was at 562. The trade was an Aug condor +530/-560/-560/+590 for a credit
> of $17.02! With only 7 days left this has to be a pure Theta play. It was
> also placed before a fed meeting so volitility would normally be up too. So
> here's the question, i would have to think this trade is meant to be
> adjusted a few times before expiration, and, it would probably be taken off
> a day or so before as well. What would the adjustments be? A $3k investment
> for a $1.7K return is impressive but I just cant think this is a put it on
> and hope trade. Thanks gang! Rich
> >
>

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