Viky
Hi, looks like the adjustment you have processed is
- Buy 2 x calls at 23 strike
- Buy [the wings] 4 x iron flies at 20/21/22
Whereas, I suggested
- Buy 2 x calls at 23 strike
- Sell [the wings] 4 x iron flies at 20/21/22
You should end up with
- 2 x 19/20/21 Put flies
- 2 x 21/22/23 Call flies
- Max risk reduced from $170 to $35
Would you please post amended risk graphs
Cheers
James
- In OptionClub@yahoogro
>
> Hi James, based on your request, please find attached two risk graphs for
> the LOW position - the first one is as the position stands today and the
> second one is with your suggested adjustments.
>
> Hope this makes you happy:-) Once again, I truly appreciate your time and
> efforts in making these suggestions.
>
> Cheers Viky
>
> P.S. By the way, my book is out and I am done with the first chapter... Last
> time when I tried reading it, I was stuck at the Box Tool but this time
> managed to get through it successfully.
> on the weekend.. Will revert with queries if any on this forum...
>
>
>
> On Thu, Sep 10, 2009 at 6:16 PM, jamesbparker999 <jp@...>wrote:
>
> >
> >
> > Viky
> >
> > If you are going to dust off Charles's book, why don't we try and combine
> > the risk graphs and dissection approaches on your LOW trade for Sep expiry.
> >
> > I notice that you have carefully legged into your current position with 4
> > seperate trades, so why not consider legging out of the position over a
> > number of trades as the market ziz-zags around.
> >
> > Your position may exactly reflect your current market forecast, in which
> > case nothing to do, but let's play the game and see if we can explore
> > alternatives.
> >
> > Let's ignore position dissection for the moment; and consider the raw
> > position; +2p 19 / -2p 21 / -2c 21 for credit $170
> >
> > Current Butterfly prices with LOW at 21.70 are approx priced at;
> >
> > 19/20/21 0.05
> > 20/21/22 0.35
> > 21/22/23 0.35
> >
> > Why not try the following trades in your position analyser;
> >
> > Buy 2 x calls at 23 strike for 0.05 each
> > Sell 4 x iron flies at 20/21/22 strike for 0.65 each
> >
> > I would be interested in seeing the risk graphs ...
> >
> > Cheers
> > James
> >
> > --- In OptionClub@yahoogro
> > "vikas_basantani" <vikas.basantani@
> > >
> > > Hi Charles, thanks for coming by and sharing some of your thoughts.
> > >
> > > Based on what I have said so far, I am not saying that synthetics or
> > position dissection are not useful. I understand the importance and
> > relavance of both of these to options trading.
> > >
> > > My point (which got partially missed out I think) was that for simple
> > positions e.g. LOW +2 19P/-2 21P/-2 21C, just how far can you go with using
> > dissection to reveal the risk that you can't possibly see through risk
> > graphs?
> > >
> > > If one had a complex position (long and/or short calls and/or puts spread
> > over multiple strikes and/or months), I am 100% convinced that position
> > dissection can reveal more than what the naked eye or risk graphs may show.
> > >
> > > In any case, I have taken out your book out of the closet once again. I
> > am bound to have some queries which I will highlight on this blog and/or
> > riskdoctor forum. Hope you will chime in to help and clear my doubts as
> > their arise...
> > >
> > > Appreciate your comments and help.
> > >
> > > Cheers Viky
> > >
> > > --- In OptionClub@yahoogro
> > "charlescottle@
> > > >
> > > > --- In OptionClub@yahoogro
> > <vikas.basantani@
> > > > >
> > > > > Hi Chris, as I feared earlier, personally for me the presentation
> > wasn't any
> > > > > easier to digest than some of the most difficult chapters in Charles'
> > > > > book:-)
> > > > >
> > > > > Having said that, thank you very much for taking the pains to arrange
> > the
> > > > > webinar. It doesn't happen very often that you get to hear from such
> > > > > experienced traders and that too for free...
> > > > >
> > > > > May it is time that I revisited his book (bought a few years ago) to
> > make
> > > > > another attempt at understanding/
> > dissection
> > > > > etc...
> > > > >
> > > > > Happy loooong weekend to all...
> > > > >
> > > > > Cheers Viky
> > > > >
> > > > > http://options101.
> > > > >
> > > > >
> > > > >
> > > > > On Sat, Sep 5, 2009 at 7:21 AM, Ricky Jimenez <rickyjim@> wrote:
> > > > >
> > > > > >
> > > > > >
> > > > > > Chris, in the future, I hope you can suggest to the speakers, to
> > > > > > explain their modifications by showing how they change the trade's
> > > > > > expiration diagram. I think Charles assumed the viewers had greater
> > > > > > vizualization capabilities than most of us have.
> > > > > >
> > > > > >
> > > > >
> > > >
> > > > To Help with that Viky, I don't know if you know about the free course
> > at the RiskDoctor Home Page that gets you though Chapter 1 with all sorts of
> > exercises. Keep at it and it will click for you.
> > > > Charles
> > > >
> > >
> >
> >
> >
>
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