Re: [TheOptionClub.com] GS TRADE [was:How do you manage your Vega?]

 

It is fine with me Michael if you want to cancel the 5/10 adjustment.
I apologize if my comment that we were now in the "home stretch"
caused you to think that this was expiration week.

But I was really confused by what else you said below. You seemed to
be saying you wanted to sell 145 straddles but they were too
expensive. Did you mean buy them? Since you had a big profitable
tent pole at 145, it certainly makes sense to buy 145 straddles, when
they are cheap, to flatten down the profit tent so as to bring more GS
expiration values under it. Then I was confused by the selling of 6
145/150 call spreads. It did eliminate downside risk but it lowered
the upper B.E. point to 148.20 with real horrors above that. Was that
based on a directional opinion for GS for the coming week?

On Mon, 10 May 2010 22:38:17 -0500, "mcatolico"
<mcatolico@mindspring.com> wrote:

>Oops. I'm completely out of (most of) my positions this month so just a
>spectator.
>
>Okay well let's let the trade idle here anyway.
>
>
>
>From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
>Behalf Of Murthy N
>Sent: Monday, May 10, 2010 10:33 PM
>To: OptionClub@yahoogroups.com
>Subject: Re: [TheOptionClub.com] GS TRADE [was:How do you manage your Vega?]
>
>
>
>
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>
>
>Michael,
>
>
>
>Great posts. The expiration is NOT this Friday, it is next Friday. This is
>one of those 5-week months.
>
>
>
>So $8 doesn't look that whopping any more :-).
>
>
>
>Murthy
>
>
>
>On Mon, May 10, 2010 at 8:17 PM, mcatolico <mcatolico@mindspring.com> wrote:
>
>
>
>Update 5/10/10
>
>
>
>I guess if you left the market last weds. and took a nice long weekend you'd
>think you missed some pretty uneventful flat trading. It's all about your
>time frame I suppose.
>
>
>
>At any rate I can't see anything really great to do with GS. The atm
>straddle has a whopping $8 or so of extrinsic value with just 4 trading days
>to go. Normally I'd be looking to sell that but who knows where this can go?
>
>
>
>I'd also consider selling deltas into this rally and trying to shore up the
>downside so that there'd be no risk there - something like selling six
>145/150 call verticals should do the trick.
>
>
>
>Why not? I think that would make Sam happy!
>
>
>
>Adjustment
>
>-6 145c/+6 150c 1.95 credit each (11.70 net credit)
>
>
>
>Net position
>
>-9 145c/+5 150c/+2 155c/+2 160c/+1 170c
>
>-1 165p/-1 145p/+1 135p/+2 130p
>
>
>
>Net overall credit is $45.62
>
>
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>
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>
>
>From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
>Behalf Of mcatolico
>Sent: Friday, May 07, 2010 10:32 PM
>
>
>To: OptionClub@yahoogroups.com
>Subject: RE: [TheOptionClub.com] GS TRADE [was:How do you manage your Vega?]
>
>
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>Update 5/7/10
>
>
>
>GS stabilized (temporarily?) so all I'll look to do here is sort of
>rebalance the trade slightly as GS hovered around 143.
>
>
>
>Adjustments
>
>Add a call bwb +1 140/-2 145/+1 155 for 0.32 net credit
>
>Sell the 145/140 put spread for 2.10 credit
>
>
>
>The idea here is simply to kind of hover the trade around the 145 strike
>with what will look like mostly a butterfly with a bit of far otm gamma all
>in preparation of expiration week.
>
>
>
>
>
>Net position:
>
>-3 145c/-1 150c/+2 155c/+2 160c/+1 170c
>
>-1 165p/-1 145p/+1 135p/+2 130p
>
>
>
>Net overall credit is $33.92
>
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