Sunday, September 13, 2009

Re: [TheOptionClub.com] LOW Adjustments

 

Hi James, thanks for continuing to go over the LOW position. I had a look at the three adjustments in the word document and all of them good very good (risk graphs look very impressive). Here are some quick comments:

Adjustment 1: looks good. What I ended up doing was very similar to your adjustment no 1 (instead of 23 calls i ended up buying 22 calls though). This removed the upside risk and will benefit if LOW comes back towards the 21 strike next week.

Adjustment 2: looks very good. removes risk. keeps profit potential centered at 22 and 20 strikes.

Adjustment 3: looks the best. even better that Adj # 2. not only keeps profit potential centered at 22 and 20 strikes, but also brings in the possibility of making big profits if LOW makes a huge move (below 19 or above 23) in either direction.

The only little thing that I find against 2 and 3 is the fact that we are now pretty close to expiration and instead of adding multiple contracts to the core position, I would rather look at simplifying the whole position and closing it at some point next week.

If we had 2-3 weeks before expiration, I  am reasonably convinced that Adj 2 and 3 would have been great choices as potential adjustments.

Thanks once again for your suggestions. Would be great if you can continue sharing your thoughts on potential adjustments on the blog or this forum.

Cheers Viky

On Sun, Sep 13, 2009 at 1:11 AM, jamesbparker999 <jp@jpfinancial.co.uk> wrote:
 

Viky

I have posted some quick and dirty pnl graphs into the files section that show 3 adjustments that

- button up the risk
- leave 'free' flies
- add slingshots [ extra units at the wings ]

Ends up with Max risk $10 / Max reward $190 ...

Cheers
James


__._,_.___
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
Give Back

Yahoo! for Good

Get inspired

by a good cause.

Y! Toolbar

Get it Free!

easy 1-click access

to your groups.

Yahoo! Groups

Start a group

in 3 easy steps.

Connect with others.

.

__,_._,___
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)