Monday, May 10, 2010

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

 

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

 

 

 

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?]

 




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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