Viky
Nice adjustment .... buying a couple of 22 calls ... buttons up the risk to the upside beyond the 22 strike .... but also gives up all profit potential beyond this point.
Do you have a plan if the market goes up above 22?
Cheers
James
--- In OptionClub@yahoogro
>
> Hi James, my last adjustment was to buy couple of 22 calls (no 23 calls or
> flies were involved) and this resulted in removal of the entire upside risk.
> Details along with the latest risk graph is posted here: *
> http://tinyurl.
>
> *I am not sure why you thought I had added 23 calls and 21 flies.
>
> Cheers Viky
>
>
> On Sat, Sep 12, 2009 at 6:10 PM, jamesbparker999 <jp@...>wrote:
>
> >
> >
> > 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
> > <vikas.basantani@
> > >
> > > 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.
> > 2/3
> > > 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
> > 40yahoogroups.
> > > > "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
> > 40yahoogroups.
> > > > "charlescottle@
> > > > > >
> > > > > > --- In OptionClub@yahoogro
> > 40yahoogroups.
> >
> > > > <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
> > > > > >
> > > > >
> > > >
> > > >
> > > >
> > >
> >
> >
> >
>
To unsubscribe from TheOptionClub, send an email to:
OptionClub-unsubscribe@yahoogroups.com
Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch format to Traditional
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe
No comments:
Post a Comment