Re: [TheOptionClub.com] GS TRADE [was:How do you manage your Vega?]

 

On Mon, 3 May 2010 20:08:42 -0500, "mcatolico"
<mcatolico@mindspring.com> wrote:

>I thought I pulled last b/a and got the 16.15cr. at any rate, the condor has
>only $0.11 risk (with your prices that would be $0.51 risk).with the ladder
>the risk would be $10.11 max between 130-135. But that's not the point of
>the ladder (i.e. to hold to expiration and lose the max amount). The point
>is use the gamma leverage of that position should there be a further
>directional, near term wave.
>
That gamma leverage is what is hardest for many people, me included,
to understand. It is clear that the position gets very profitable if
GS plumets below 120 but my impression is that you have tricks to use
if it gets into the 130s this week or next. Perhaps if you explained
what sort of actions you have in mind now for such a scenario, we will
understand better the thinking behind this position.

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