Monday, January 4, 2010

[TheOptionClub.com] Re: BWB adjustment plan

 

Joey ... nothing wrong with the trade if that was your forecast support level ..... it may be that you were just being a tad agressive with your +20 87p / -30 89p / +10 90p .... whereas a more conventional BWB would have been something like +10 87p / -20 89p / +10 90p .... cheers, James

--- In OptionClub@yahoogroups.com, Joey Huckabee <trading.ocyg@...> wrote:
>
>
> I can tell by the comments that the initial placement of the position was flawed
> and if I wanted to pursue the 89 support level of TLT (which was the reason for
> the initial trade) I should have used some other option strategy instead of a
> BWB.
>
> In hindsight I did not really feel that great about the risk / reward picture
> and the chart (other than the support).
>
> lesson learned... lets hope it sticks.
>
> Joey
>
>
> /*]]>*/ --> -->
> On January 2, 2010 at 8:56 PM mcatolico <mcatolico@...> wrote:
>
>
> >  
> >
> >
> > Don't know how active or aggressive you are but I'd add a ladder here: -10
> > 90p/+10 89p/+10 88p for zero debit which you should be able to get (maybe
> > even for a slight credit). That leaves -20 89/+10 88/+20 87.
> >
> > Depending on how things play out this gives you a few outs. 1) if tlt moves
> > back higher you just wait it through and buy back your risk(or ignore it)
> > expiration week. 2) if tlt drifts toward 89 you either double down of sorts
> > via something like a -10 89/+20 88 backspread for even or revert back to
> > your original position by selling back the ladder (either the +10 90/-10
> > 89/-10 88 or +10 90/-10 89/-10 87 depending on prices with the idea of
> > adding a credit or adjusting for zero additional debit). 3) on a big gap or
> > swift move down to and through 89, sell out the extra gamma from the ladder
> > by selling the atm strike at the time (e.g. at 88 add +20 89/-40 88/+10 87
> > for $0 or better) and then work to fight the remaining short otm vertical.
> >
> > -----Original Message-----
> >
> > >
> > > Hey gang,
> > >
> > > Just wanted to pull some thoughts on a trade I have in play, right now I
> > am not planning on doing anything but wanted to know if I am missing
> > something... like being able to adjust the trade to make it better.
> > >
> > > TLT
> > >
> > > +10 TLT Jan 2010 90 PUT
> > > -30 TLT Jan 2010 89 PUT
> > > +20 TLT Jan 2010 87 PUT
> > >
> > > trade initiated at a 0.35 credit.
> > >
> > > thanks for any input.
> > >
> > > Joey
> > >
> >
> > rce.
> >
> > To unsubscribe from TheOptionClub, send an email to:
> > OptionClub-unsubscr ibe@yahoogroups. comYahoo
> > [mailto:OptionClub-unsubscribe%40yahoogroups.comYahoo] ! Groups Links
> >
> >
> >
>
>  
>

__._,_.___
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
.

__,_._,___
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)