You mean extrinsic, right?
I rarely worry about assignment. If there is any intrinsic value the assignment is actually free money.
From: OptionClub@yahoogro
ups.com [mailto:OptionClub@yahoogroups.com ] On Behalf Of Gayatri Maskeri
Sent: Thursday, May 13, 2010 10:10 AM
To: OptionClub@yahoogroups.com
Subject: Re: [TheOptionClub.com] GS TRADE [was:How do you manage your Vega?]
This has been a very interesting and revealing exercise so far and I have a question here. Although our break even price is near 147, we have sold a put for 165 which is deep in the money and has extrinsic value of only $.05. Don't we have to be concerned about getting assigned here? (I have just been watching here - no real $$ at risk for me).
Chet.
From: Ricky Jimenez <rickyjim@bestweb.
net >
To: OptionClub@yahoogroups.com
Sent: Thu, May 13, 2010 7:48:45 AM
Subject: Re: [TheOptionClub.com] GS TRADE [was:How do you manage your Vega?]
But I was wrong on the expiration P/L. At 145 it is +30.06, at 150 it
is -39.94. The B.E. is approximately at 147.16 and the close at
147.20 is only 74 cents into negative territory. The formmating of
your post looks fine at the Yahoo Group site so something strange
happened with the email.
On Wed, 12 May 2010 23:41:39 -0500, "mcatolico"
<mcatolico@mindspring.com > wrote:
>Ricky's correct on net position:
>
>Net position(corrected)
>
>-15 145c/+15 150c/+2 155c/+2 160c/+1 170c
>
>-1 165p/-3 145p/+4 140p/+1 135p/+2 130p
>
>Net overall credit is $50.06
>
>[no idea what's going on with formatting]
>
>
>
>-----Original Message-----
>From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com ] On
>Behalf Of Ricky Jimenez
>Sent: Wednesday, May 12, 2010 11:27 PM
>To: OptionClub@yahoogroups.com
>Subject: Re: [TheOptionClub.com ] GS TRADE [was:How do you manage your Vega?]
>
>What happened to your formatting? The 5/12 net position has -3*145p
>not -2*145p. This is the first time I remember you not having the ATM
>in the profit zone. I get the expiration loss at 145 = 9.94, 147 =
>37.94 and at 50 = 79.94. B.E. at 142.515. But I'll check again in
>the morning when I am not as sleepy.
>
>
>On Wed, 12 May 2010 21:22:34 -0500, "mcatolico"
><mcatolico@mindspring.com > wrote:
>
>>
>>
>>
>>Update 5/12/10 Aargh. Should have gone with my aggressive instinct that I
>mentioned yesterday (the call ladder versus the slightly more defensive
>backspread). GS powers back underscoring how volatile this thing has been.
>For the record, the back spread I put on yesterday (-5 140/+9 145) is up on
>the 5-point rally in GS about $1 net whereas that 140/45/50 ladder put five
>times would have been up about $4. Okay so the first order of business is to
>shift some of the delta risk a bit. Volatility came down a tad but this time
>of the cycle is a great moment to look at some of the leveraged backspread
>varieties as well. With today's adjustment I'll take a little bit of
>additional upside risk in exchange for some solid downside strength (keeping
>in touch with Sam's original directional lean again). Adjustments +5
>140c/-15 145c/+10 150c for $1.09 credit each (net credit of 5.45) -2 145p/+4
>140p for $0.03 debit each (net debit $0.06) Net position -15 145c/+15
>150c/+2 155c/+2 160c/+1 170c -1
>>165p/-2 145p/+4 140p/+1 135p/+2 130p Net overall credit is $50.06 From:
>OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com ] On Behalf Of
>mcatolico Sent: Tuesday, May 11, 2010 9:41 PM To: OptionClub@yahoogroups.com
>Subject: RE: [TheOptionClub.com] GS TRADE [was:How do you manage your Vega?]
>Update 5/11/10 Well sometimes the dumb trades work out. GS eventually
>capitulated today, vol declined along with the move. So I'll make an
>adjustment to chip away at some of the upside risk I created yesterday. Even
>though volatility continued to fade a bit, the risk adjustment trumps in
>this instance. Adjustment -5 140c/+9 145c $0.95 net debit The more
>aggressive alternative is to add five -140/+145/+150 ladders for about 1.85
>credit each. This trade, which I'll reject, further secures the downside
>with all kinds of credit, leaves some upside leverage but would require a
>very swift rally move. There's already a bit of gamma in the trade anyway so
>I'll opt for the "safer" adjustment
>>listed above. Net position -5 140c/+5 150c/+2 155c/+2 160c/+1 170c -1
>165p/-1 145p/+1 135p/+2 130p Net overall credit is $44.67 From:
>OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com ] On Behalf Of
>mcatolico Sent: Monday, May 10, 2010 10:17 PM To: OptionClub@yahoogroups.com
>Subject: RE: [TheOptionClub.com] GS TRADE [was:How do you manage your Vega?]
>Update 5/10/10 I guess if you left the market last weds. and took a nice
>long weekend you'd think you missed some pretty uneventful flat trading.
>It's all about your time frame I suppose. At any rate I can't see anything
>really great to do with GS. The atm straddle has a whopping $8 or so of
>extrinsic value with just 4 trading days to go. Normally I'd be looking to
>sell that but who knows where this can go? I'd also consider selling deltas
>into this rally and trying to shore up the downside so that there'd be no
>risk there - something like selling six 145/150 call verticals should do the
>trick. Why not? I think that would make
>>Sam happy! Adjustment -6 145c/+6 150c 1.95 credit each (11.70 net credit)
>Net position -9 145c/+5 150c/+2 155c/+2 160c/+1 170c -1 165p/-1 145p/+1
>135p/+2 130p Net overall credit is $45.62 From: OptionClub@yahoogroups.com
>[mailto:OptionClub@yahoogroups.com ] On Behalf Of mcatolico Sent: Friday, May
>07, 2010 10:32 PM To: OptionClub@yahoogroups.com Subject: RE:
>[TheOptionClub.com] GS TRADE [was:How do you manage your Vega?] Update
>5/7/10 GS stabilized (temporarily?) so all I'll look to do here is sort of
>rebalance the trade slightly as GS hovered around 143. Adjustments Add a
>call bwb +1 140/-2 145/+1 155 for 0.32 net credit Sell the 145/140 put
>spread for 2.10 credit The idea here is simply to kind of hover the trade
>around the 145 strike with what will look like mostly a butterfly with a bit
>of far otm gamma all in preparation of expiration week. Net position: -3
>145c/-1 150c/+2 155c/+2 160c/+1 170c -1 165p/-1 145p/+1 135p/+2 130p Net
>overall credit is $33.92
>
>
>--------------------- --------- ------
>
>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. ! Groups LinkscomYahoo
>
>
To unsubscribe from TheOptionClub, send an email to:
OptionClub-unsubscribe@yahoogroups.com
No comments:
Post a Comment