Option Trading Articles

Tuesday, June 2, 2009

[TheOptionClub.com] WILL THIS WORK?

stock trading at 100
sell a put and a call at 90
if the call is exorcised, exercise the put (european)

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Re: [ConservativeOptionStrategies] Update on Dr. Joe's DLS Strategy

Bob,

Thanks so much for answering my questions. I was trying to understand Dr. Joe's DLS strategy. My understanding is the only difference between DLS and covered call is that DLS can average down Leaps during the down market.. If the DITM Leaps has a delta of 1, then the DLS portion of the portfolio has the same risk/reward with the covered call. But the additional cash reserve will enable you to purchase additional leaps in the down market. I know this is an income strategy. But if I don't need the income and will invest the income, I was wondering what kind of performance the strategy will be, comparing to the covered call. Also, can you elaborate more on the hedge you used if you can? Have you tried DLS strategy on stocks (not deep ITM leaps but one strike below but close the entire position once it reached 5-10% profits like recommended by www.compoundingstockearning.com)?

I really like this ground, but it is not active and I don;t know where Dr. Joe is

Thanks in advance,

Mike

--- On Thu, 5/28/09, Bob Hug <rchug@bellsouth.net> wrote:

From: Bob Hug <rchug@bellsouth.net>
Subject: Re: [ConservativeOptionStrategies] Update on Dr. Joe's DLS Strategy
To: ConservativeOptionStrategies@yahoogroups.com
Date: Thursday, May 28, 2009, 2:17 PM

Mike:

I have been trdaing it since 9/07 (yup, right near the market high!). While I was still able to generate decent income through the move down of the market, if I hadn't hedged my positions, my portfolio value would be substantially down. However, this was the case with any kind of income generation covered call strategy. I used profits from my hedge to purchase additional positions. If/when my initial positions recover, I will simply have many more positions with which to generate on-going income. It has worked well for me, but because I hedged my positions.

Bob

----- Original Message -----

From: michaelxue88

To: ConservativeOptionS trategies@ yahoogroups. com

Sent: Thursday, May 21, 2009 2:04 PM

Subject: [ConservativeOption Strategies] Update on Dr. Joe's DLS Strategy

Hi All,

I have not traded this strategy at all. Can someone traded DLS kind enough to give us an update on how it fared since last summer.

TIA,

Mike

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[ConservativeOptionStrategies] Re: strategies

I very rarely do calendars or double calendar, but they certainly do have their place in a portfolio.

--- In ConservativeOptionStrategies@yahoogroups.com, David Steele <dsteele_24@...> wrote:
>
> what kind of strategies does this group know. does anybody do calendars, double calendars, or calendar leaps.
>

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[ConservativeOptionStrategies] Re: if I sell a put and a call at the money

Being short a straddle is "technically" unlimited risk, but no stock ever opened up at infinity, although some have opened at darn near zero.

Try to incorporate some technical analysis in your selections. Being short premium is in some ways only "good" as the stock. A successful covered write or short premium play is better than one with tons of premium.

You can also sell a "strangle" or a out-of-the money call and put, usually a 25 delta or less.

Bill

--- In ConservativeOptionStrategies@yahoogroups.com, "iscott101" <scott@...> wrote:
>
> --- In ConservativeOptionStrategies@yahoogroups.com, "paul7313" <paul7313@> wrote:
> >
> > and the market goes up. how do I profit?
> >
> > or is it better to buy a call and a put ATM? How do I profit?
> >
> BUY 500 SHARES AT $9.00 ($4500)
> > SELL 5 CALLS AT .75 GET $375
> > SELL 5 PUTS AT .75 GET $375
> > IF AT EXPIRATION: STOCK OVER 9.00
> > STOCKS GET ASSIGNED AT 9.00
> > YOU GET 4500 FOR STOCK AND 750 FOR OPTION PREMIUMS
> > PROFIT 750 MINUS COMM.
> > ........
> > STOCK BELOW 9 AT EXPIRY
> > YOU STILL OWN 500 SHARES
> > YOU MUST BUY 500 MORE AT 9.00
> > YOU NOW OWN 1000 @9.00 PLUS KEEP 750 FOR PREMIUMS ON THE OPTIONS
> > .................
>

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Re: [TheOptionClub.com] Is it worth it?

Thanks a lot for the info, from 2 weeks ago, Greg.

--- On Tue, 5/19/09, Thao Tran <ttran@ifcproperties.com> wrote:

From: Thao Tran <ttran@ifcproperties.com>
Subject: Re: [TheOptionClub.com] Is it worth it?
To: "OptionClub@yahoogroups.com" <OptionClub@yahoogroups.com>
Date: Tuesday, May 19, 2009, 8:32 PM

Greg:

I'm in Alameda. Can I information on the SF Option
Club? Thanks

Thao

Sent from Thao's mobile phone

Thao Tran
415/830-1590 (mobile)

Jann & Tran | IFC Properties
350 Sansome Street, Suite 200 ~ San Francisco, CA 94104
415/788-5900 x207 - 415/946-3474 (fax)

On May 19, 2009, at 9:08 AM, Greg Farber <gregfarber@gmail. com> wrote:

a a: is it worth it..? i asked this group the same question about a year ago. like you, i really wanted to know if there really were people out there making money trading options. I felt like little Virginia O'Hanlon, wanting to know of there really was a Santa Claus.

After almost two years of bumping around in the options arena, I can say Yes Virginia, there really are folks out there who trade options for a living. But out of all the participants I've seen, NOT A LOT make their living trading.

Maybe it's fair to compare this to poker players or bowlers or rock musicians. After many years of (possibly obsessive) study, focus and practice, some will be able to supplement their income (they still hold a day job) and some will be able to "quit their day job." And some will be able to earn enviable sums. Ask them is it all worth it? They will all probably say ABSOLUTELY because they are dong what they love. Do you love trading?

I belong to the San Francisco Bay Area Options Group. Joining this group was a breakthrough for me. I met and got to know a handful of the regulars that make their living trading. Maybe you can find a group in your area..? It does build confidence to see others who really (virginia) do trade for a living.

Of course, you need to be reasonable about your funding and your expectations. I recommend reading Van Tharp's "Trade Your Way to Financial Freedom" It will give you some good things to think about if you are considering trading as a career.

My last observation is that trading is a game of knowledge, skill, strategy and risk. I believe that there are no shortcuts, autotrade programs or services that will "get you there." If options seems like a lot to take on, you might try trading equities. Compared to equities, I think that options is like playing chess in 3-D. Maybe 4-D.

hope this helps. best wishes, ~gf (still learning)

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[TheOptionClub.com] (unknown)

has anyone read Sheridians new book.

http://www.bookfinder.com/dir/i/MONTHLY_INCOME_STRATEGIES_WITH_OPTIONS-Adjusting_Your_Position_to_Earn/0470223111/

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Monday, June 1, 2009

Re: [TheOptionClub.com] IC Delta as an Exit/Adjustment Indicator

I will add long call ATM -80$ for Oct .
My risk in the trade will be:
risk IC (4.2)+ debit paid on long call (6.65)=10.80$

my reword plan will be-answer when to get out from trade? 10.80*1.10=11.20$
looking for 10%.

Nava

From: "srj3inc" <faltu0@gmail.com>
Sent: Monday, June 01, 2009 11:09 AM
To: OptionClub@yahoogroups.com
Subject: Re: [TheOptionClub.com] IC Delta as an Exit/Adjustment Indicator

"I want to get out from the trade with at 10%-20% profit ,so I need to sell long call 10.80*1.1=11.88$"

what strike/month? how do you get 11.88?

--- In OptionClub@yahoogroups.com, "Nava Elgar" <nava@...> wrote:
>
> I will try to explain myself with example:
>
> Let say I have IC on FLS :bull put 60/55+bear call 80/85 credit 0.80$ risk
> 4.20$ for June.
>
> and now one of the short broke assume the side of short call 80$.
> what do I do?
> 1 . The IC stay as it is.
> 2.add long call for Oct (I can't see shorter time in the chain) at $ 80 ask
> price :6.6$
>
> what is your new risk: (6.60+4.2)=10.80 debit.
> I want to get out from the trade with at 10%-20% profit ,so I need to sell
> long call
> 10.80*1.1=11.88$
> is it make sence?
>
> we can go on and built the progrem :with exit point PE,SE.
> (btw I call it IC plus )
>
> Nava Elgar
>
>
> www.GoBulls.co.il
>
> ----------------------------------------
>
> From: "Akram Khan" <bronchoscope@...>
> Sent: Saturday, May 30, 2009 4:58 AM
> To: OptionClub@yahoogroups.com
> Subject: RE: [TheOptionClub.com] IC Delta as an Exit/Adjustment Indicator
>
> Nava when the IC hits your short strike you are saying you buy a long
> option ATM two months out turning that strike into a calendar and having an
> extra long strike (from your original IC)?
>
> Akram Khan
>
>
> From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
> Behalf Of Nava Elgar
> Sent: Friday, May 29, 2009 2:05 PM
> To: OptionClub@yahoogroups.com
> Subject: re: [TheOptionClub.com] IC Delta as an Exit/Adjustment Indicator
>
>
> I adjust Iron Condor in this way:
> when the stock hits the short strike I am hadding long ATM for another 2
> month.
>
> When it happen my Iron condor now he's Iron condor plus.
>
> I am looking from my long to cover my original risk +the risk of the long
> +% gain.
>
> Did it in the past and it is working.
>
> Keep simple.
>
> Nava Elgar
>
>
> www.GoBulls.co.il
>
> ----------------------------------------
>
> From: "cguy444" <carmelo5791@...>
> Sent: Friday, May 29, 2009 6:09 AM
> To: OptionClub@yahoogroups.com
> Subject: [TheOptionClub.com] IC Delta as an Exit/Adjustment Indicator
>
> Does anyone here use delta as one way of determining when to exit or adjust
> an Iron Condor position?
>
> I recently watched a CBOE webinar by Dan Sheridan where the topic was
> adjusting condors. He said when the delta reaches a certain point think
> "Danger Will Robinson" :-). He didn't get into too many specifics so I
> thought I'd ask the group.
>
> Thanks,
>
> Carmelo
>

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