Michael,
As someone that is specializing in GOOG for so long, did you notice any of the 'special' quirks mentioned in: "Has Google Stock Price Been Manipulated?
(see http://papers.
Given your experience, do you think he has any valid point?
Also, regarding backtesting-
BBen
--- In OptionClub@yahoogro
>
> Not sure if I'm getting your point exactly but - having traded goog every
> month since it started trading in '04 (I think) - I can say that it does
> have its own little quirks but in general it's really no different than any
> other trading vehicle.
>
>
>
> Prices/implied volatility are just the consensus bet on value. If you trade
> that vehicle either or long or short you are simply doing what everyone who
> trades is doing i.e., saying that the market consensus is either too high or
> too low and that you think differently. Any vehicle that has occasional
> binary events (such as earnings releases) is likely to have a few
> multi-strike gaps (though a ten point move in a 580 stock is hardly
> earth-shattering)
> consolidation or indecision when price seems to go nowhere for months. If
> you could find a model that back-tested profitably in goog, you would have a
> model that back-tested profitably in just about every other tradable
> instrument. Now whether that backtest would be of any value going forward is
> a completely different story.
>
> J
>
>
>
>
>
>
>
> From: OptionClub@yahoogro
> Behalf Of Adam Green
> Sent: Friday, November 27, 2009 3:32 PM
> To: OptionClub@yahoogro
> Subject: Re: [TheOptionClub.
>
>
>
>
>
> I haven't read the whole thread, but I would caution anyone using horizontal
> positions or anything relying upon limited movement (not volatility) in
> GOOG. As we caught a glimpse over the holiday break, it has no hesitation
> to move through a strike. Look at days when GOOG has moved through more
> than three strikes ... or find a month when a Straddle on GOOG would not
> have been profitable (assuming a reasonably durable trading plan.)
> F'rinstance, I can't back-test it easily on thinkorswim (maybe someone can
> show me?) but I've noted for some years now that I can buy a Straddle, wait
> for it to move through a strike, take profit off the one side and roll it
> vertically or horizontally either adding or subtracting contracts depending
> upon preset rules for risk and profit based on technical analysis of price
> action, especially momentum and overall market action.
>
> On Fri, Nov 27, 2009 at 12:32 PM, bben1006 <bben1006@..
>
>
>
>
>
> MC--
> I did, and this is what I got with an IV of 55% - I wonder why?(I must have
> mistyped something.)? In any case, I think that with your Hoadley's
> calculator it will be very easy for you to replicate the entire comparison
> exercise (FSLR vs GOOG, say) - for the point I was trying to make.
>
> Regards,
> BBen
>
>
> --- In OptionClub@yahoogro
> "mcatolico" <mcatolico@> wrote:
> >
> > Why wouldn't you use an option calculator? With your parameters on goog I
> > get the 630 implied value at 14.95 or so.
> >
> > -----Original Message-----
> > From: OptionClub@yahoogro
> [mailto:OptionClub@yahoogro
> On
> > Behalf Of bben1006
> > Sent: Thursday, November 26, 2009 11:12 AM
> > To: OptionClub@yahoogro
> > Subject: [TheOptionClub.
> >
> >
> >
> > Your best way to realize/see the differences between these stocks is to
> > 'standardize' the option chain of each underlying by dividing the entire
> > chain (put and call prices and the strikes all for the same month) by the
> > current price of the underlying stock. The resulting standardized chains
> > will illustrate to you the (nonlinear) pricing-effect of the volatility,
> > giving you the relative costs of the options in relative terms to the
> > percent at-the-money and out-the-money strikes.
> >
> > For example (all with approximate round-offs) : FSLR is currently $120.97,
> > with ATM IV 55%.
> > The Dec 130 call is nearly 7.5% out-of the money and has a relative price
> of
> > 2.28% ($ 2.75/$121).
> >
> > Compare this to, say: GOOG, currently at $584.75, with ATM IV 22% .
> > The Dec 630 call is also nearly 7.5% out-of-the money, but it has a
> relative
> > price of only 0.22% ($1.25/$585)
> > volatility, the price of this GOOG 630 Call option should be about $13.3.
> >
> > You can do the rest of the calculations.
> >
> >
> >
> >
> >
> > --- In OptionClub@yahoogro
> "Peter Gum" <peter.gum@> wrote:
> > >
> > > Take look at the premiums on things like AMZN, GS, BLK and IBM, for
> > example.
> > > The absolute amounts are substantial, though I have not done the
> > > money-at-risk or ROI calculations. An enlightening exercise can be to
> > > compare the return on the spread with the premium on a comparably priced
> > (to
> > > the spread) stock. Spreads of any sort look attractive sometimes.
> > >
> > >
> > >
> > > phg
> > >
> > >
> > >
> > > -----Original Message-----
> > > From: OptionClub@yahoogro
> [mailto:OptionClub@yahoogro
> On
> > > Behalf Of billb_
> > > Sent: Monday, November 23, 2009 9:37 AM
> > > To: OptionClub@yahoogro
> > > Subject: [TheOptionClub.
> > >
> > >
> > >
> > >
> > >
> > > I don't understand what price has to do with any strategy to be quite
> > > honest. If price of the underlying gave you an edge, wouldn't that be
> > arbed
> > > away?
> > >
> > > --- In OptionClub@yahoogro <mailto:OptionClub%
> <mailto:OptionClub%
> > > "drrobhansen" <robhansen5252@
> > > >
> > > > I had heard either during a webinar or maybe in a magazine that
> calendar
> > > spreads are best put on with high priced stocks. Is there anyone that
> > would
> > > explain to me why it would be advantageous? Or maybe I'm just mixing
> this
> > up
> > > with some other strategy?
> > > >
> > > > Thanks,
> > > > RFH
> > > >
> > >
> >
> >
> >
> >
> > ------------
> >
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> --
> Adam
>
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