>> Do you have a plan if the market goes up above 22?
Given that we are so close to Sept expiration and the position cannot lose money above 22, the plan is to DO NOTHING (no more new adjustments) if LOW gaps above 22.
If there is no big gap opening in either direction, I will be looking at buying back the middle (21) straddle at some price on Wednesday or Thursday.
--- In OptionClub@yahoogro
>
> 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
> > > > > > >
> > > > > >
> > > > >
> > > > >
> > > > >
> > > >
> > >
> > >
> > >
> >
>
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