Tuesday, June 22, 2010

Re: [TheOptionClub.com] see if I got this

 

No, you LEEP of a tall bridge after this trade looses money.
First you buy the Leap.

Sorry, I couldnt resist.

The trade you describe is kind of basically swing trading.
Using options for a kind of a synthetic stock position.

Altho it is very dangerous to trade ATM Leaps.

How about DITM leap call, then sell front month calls against it?

You could remove some of the Vega risk of Leaps



--- On Tue, 6/22/10, paul7313 <paul7313@yahoo.com> wrote:

From: paul7313 <paul7313@yahoo.com>
Subject: [TheOptionClub.com] see if I got this
To: OptionClub@yahoogroups.com
Date: Tuesday, June 22, 2010, 10:49 AM

buy an ATM leep put and call
Stock goes up,  sell the call for profit
Stock goes down, sell put
repeat the process



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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.

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