Bill
From: drrobhansen <robhansen5252@
To: OptionClub@yahoogro
Sent: Monday, September 28, 2009 1:25:16 PM
Subject: Re: [TheOptionClub.
Well, I really like the show's format. It's pretty light and funny at times, and it's always good to see other points of view and get an idea how these options professionals think. Not sure how big their audience is, as I tend to think that there aren't many options traders out there. I would guess that less than 1% of people who have any market exposure have ever traded an option in their lives. Probably more like .01%. But CNBC did recently change their time slot to prime time, so maybe they have a big enough audience.
RFH
--- In OptionClub@yahoogro ups.com, rvd <rvdidit@... > wrote:
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> I agree.
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> In fact I bet they loose their audience as they get into more advanced options adjustments
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> Ross.
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> Rob,
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> I am surprised they are talking about theoretically unlimited risk trades in the popular media. I heard about this program, but never cared to watch it. I am not necessarily against such trades, but you need to have a clear action plan. What happens if USO goes down to 30? Do you make an adjustment, and if yes when? Or do you let it go and get assigned long underlying? What would be the consequence of an adjustment, increase risk, decrease? What happens if after you make an adjustment it starts going back up again? What will you do then?
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> There is also a 20% plus credit received as margin requirements for that extra put.
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> The second trade is called a broken wing condor (iron condor without the long put). Again, you need to be prepared with action and its reaction.
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> Murthy
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> On Sun, Sep 27, 2009 at 8:56 PM, drrobhansen <robhansen5252@ ...> wrote:
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> Hey, I'm surprised that no one here has mentioned "Options Action" on CNBC. In Chicago, it's on at 7:30 PM for half an hour. It's hosted by Melissa Lee and features three or four regulars who happen to be options traders. I started watching it a couple of months ago, and the content was in my opinion beginner to intermediate strategies. Lately they have been discussing ratio spreads, risk reversals, and collars financed by put spreads. So they have gotten more intermediate to advanced with their positions. They always take the time to explain the risks and rewards with nice profit and loss graphs. My favorite segment of the show is called "Put up or Shut up." Here, two of the participants agree on the direction of a particular stock, but disagree on the derivatives used to profit on the expected move. This week, they agreed that oil stocks will be moving lower, and one strategy involving USO would be to buy a 1 X 2 put spread,
> specifically +1 nov_33p for $2.00 and -2 nov_30p for $1.80 for a cost of only $0.20. The other participant went with -1 nov_32p for $1.60 and sold one 37/42 call spread for $0.80 credit, thus collecting a total of $2.40 in premium. The risk profile in TOS for this trade looks like a condor with no downside protection. Next week they will assess their trades and suggest adjustments if necessary. By the way, TOS sponsors the show and the commercials they have are pretty entertaining as well. Anyone out there watch this?
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> RFH
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> ------------ --------- --------- ------
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