At the time I was continuing to add small downside protection against the
base condor. The long 140 strike, to me, was both an anchor for the condor
which stretched north and, with this backspread, was a link in a long
ladder. When I'm laying the bricks in these things over time sometimes I
don't verbalize the decision. At its simplest I had a chance to add some
downside gamma cheaply. Was it the best choice? this time it didn't pan out.
That happens...
-----Original Message-----
From: OptionClub@yahoogro
Behalf Of Ricky Jimenez
Sent: Friday, May 07, 2010 10:06 AM
To: OptionClub@yahoogro
Subject: Re: [TheOptionClub.
On Thu, 6 May 2010 22:49:23 -0500, "mcatolico"
<mcatolico@mindsprin
>Ricky, that ladder used on 4/30 leveraged the existing 140 strike embedded
>in the condor which was the core of the position. Looked at on its own, the
>10 point wide version (-145/+135/+
>it on a 5-point move. By the way, this is why it is typically useless to
>hedge atm risk with far otm strikes; those far away hedges need a whole lot
>more movement to make them worth anything.
Michael, please give more detail about what leverage you had in mind
when you added 130p + 135p -145p to the 140 put. Thanks.
------------
The goal of TheOptionClub is to provide a forum for members to work together
for the purpose of furthering our individual understanding option trading.
All messages and postings, and any materials circulated are provided for
discussion and educational purposes only. No statement contained in any
materials from TheOptionClub should be considered a recommendation to buy or
sell a security or to provide investment, legal or tax advice. All
investors are encouraged to consult a qualified professional before trading
in any security. Stock and option trading involves risk and is not suitable
for most people. There is no guarantee that any information provided is
accurate and, may in fact, be wrong. It is understood that the participants
in TheOptionClub have varying backgrounds and degrees of experience in
option trading, and that regardless of experience each member is considered
a student. As such, any information distributed through TheOptionClub
should be considered with a critical mind and not relied upon as an
authoritative source.
To unsubscribe from TheOptionClub, send an email to:
OptionClub-unsubscr
To unsubscribe from TheOptionClub, send an email to:
OptionClub-unsubscribe@yahoogroups.com
No comments:
Post a Comment