Wednesday, July 8, 2009

Re: [TheOptionClub.com] can I trade options on futures like options on stocks?




This is not my trade but comes from a Sherwood Tucker
I use to subscribe too his newsletter, as this guy can teach me a lot.

No I don trade at present too busy paying bills. Used to trade straight shares and made profit, options ate all that long back. Might give it a go though, again.

As the wheat farmer said after winning big on the lottery, I might go back to farming until I go broke again. True Story

Mr. Tuckers contact deals if you are interested.
209 West Jackson, Suite 600
Chicago, IL 60606

Tel: 800.207.2174
Tel: 312.987.2055
Fax: 312.697.1064

Email: st@manducatrading.com

www.manducatrading.com
www.matrixfutures.com

His report

November 29, 2004

In looking at the Gold Market and the potential for a big upside move because of the weakening dollar, the inflation picture and also rising interest rates there is an option strategy I am currently recommending. I am not going with an outright long position of buying straight calls because Gold has had a large run-up recently and there is a big possibility of a $15-$20 retracement, that I wouldn't want to get caught up in with an outright long position. I also don't want to miss out on an exponential move to the upside if one develops so here is the strategy I am recommending.

Gold: April Daily:


per position: (these #'s do not include commission)

Buy 1 April Gold (Future) @ 457.90

Buy 1 April Gold 455 Put @ -$1630.00

Sell 2 April Gold 485 Calls @ $890.00 x 2= +$1780.00

The margin is approx: $700

If Gold goes up to and above $485 (strike price of calls) the profit will be: $2860 (per position). $2710 profit on future. $150 profit on calls/puts

If Gold goes to zero you will lose $290.00 on the future (difference between where you bought future and strike price of Put), but you keep the credit of $150.00 (difference of calls/puts). So the net loss is $140.00 (per position).

In my opinion it is a great risk/reward, 4 month play in Gold. Seasonally Gold can do very well in the last month of the year. The only drawback is selling the 485 calls because you are limiting your upside potential. If that scenario does develop I will be issuing a follow-up trade to take advantage of this occurrence.

I hope everyone had a great Thanksgiving Holiday. If you have any questions please call or email me anytime.

Sincerely,

--- In OptionClub@yahoogroups.com, Adam Green <adam.cell.phone@...> wrote:
>
> On Tue, Jul 7, 2009 at 10:43 AM, Aaron Wright<metalwright@...> wrote:
> >
> >
> > Dunno, gis, I had a great "fire and forget" spread strategy.  I would put
> > credit spreads on OEX for about 20% or more return every month, then just
> > let them expire.
> >
> > Well, let's just say that was cool until I took a 100% loss twice with poor
> > risk management.  Then my account was set to 0 and I was a "former trader"
> > for a while.  Here is what went wrong:
> >
> > 1.  No trading plan
> > 2.  No understanding of how the strategy worked or options behaved
> > 3.  Countless other things that I am not aware of yet!
> >
> > Now, back to lurking.
> >
> > Aaron
>
> Classic fail and full credit to you for sharing the scars.
>
> I've been there as buyer and seller of options, blowing up trades like
> fireworks with long fuses, short fuses, no fuse ... but always on
> paper ... sometimes literally with pencil and paper.
>
> There's "lottery ticket" trades like ICs, but there's no such thing
> really as set and forget, especially selling where the risk is usually
> twice the amount taken in on the sale!
>
>
> > ________________________________
> > From: Meuter Gisbert <gismeu@...>
> > To: OptionClub@yahoogroups.com
> > Sent: Tuesday, July 7, 2009 9:54:19 AM
> > Subject: Re: [TheOptionClub.com] can I trade options on futures like options
> > on stocks?
> >
> > Hmm ????????????
> >
> > <<I sell stock option spread and then forget.  The options expire and I
> > spend the profit.  Is it the same with futures?>>
> >
> > I would not forget about it. It can always go against you!!!
> > Don't spend your profit until you closed out the trade or the options
> > expired.
> >
> > gis
> >
> >
>
>
>
> --
> Adam
>

__._,_.___
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-unsubscribe@yahoogroups.com
Recent Activity
Visit Your Group
Yahoo! Finance

It's Now Personal

Guides, news,

advice & more.

New web site?

Drive traffic now.

Get your business

on Yahoo! search.

Non Sibi

Sed Patriae

Support Navy Kids

And Our Country

.

__,_._,___
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)