Saturday, August 29, 2009

RE: [TheOptionClub.com] General ratio spread inquiry

 

It is in vegas

 

From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On Behalf Of mcatolico
Sent: Saturday, August 29, 2009 8:44 AM
To: OptionClub@yahoogroups.com
Subject: RE: [TheOptionClub.com] General ratio spread inquiry

 

 

Short wrangle

-----Original Message-----
From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
Behalf Of asdfffg1
Sent: Friday, August 28, 2009 6:53 PM
To: OptionClub@yahoogroups.com
Subject: [TheOptionClub.com] General ratio spread inquiry

If XYZ is at 50, and a call ratio spread and put ratio spread are
created using the same month expiring option contracts, what is this
combination called? Is there even a name for it when ratio spreads are
combined, or is it simply two basic trades? An example is below. Thanks Guys

XYZ at 50
Trader buys one Dec 2009 ATM 50 call and sells two Dec 2009 55 calls. The
trader then buys one Dec 2009 ATM 50 put, and sells two Dec 2009 45 puts.

------------------------------------

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.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.

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Posted by at No comments:

Re: [TheOptionClub.com] what happens when a debit spread expires out of the money?

 

You lose the entire debit because the spread is worthless. Technically, you obtain the credit when you open the position (sell to open - STO) and at expiration the credit spread expires worthless; thus, keeping the entire credit that you obtained when you opened the position. You can also buy-to-close (BTC) the position at any time until expiration, keeping the difference between what you sold it for and the amount it costs to close the position.

On Sat, Aug 29, 2009 at 8:01 AM, paul7313 <paul7313@yahoo.com> wrote:
 

credit spreads that expire out of the money give me the money in the spread at expiration, what happens with a debit spread?


__._,_.___
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.

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Posted by at No comments:

[TheOptionClub.com] Re: what happens when a debit spread expires out of the money?

 

--- In OptionClub@yahoogroups.com, "paul7313" <paul7313@...> wrote:
>
> credit spreads that expire out of the money give me the money in the spread at expiration, what happens with a debit spread?
>
You keep the money you got when you sold the short, and you are still the proud owver of the long ... assumimg it hasn't expired yet.

BTW, one thing I learned the hard way writing diagonals is this: I was called - fine with me - so the owner of my short took stock away from me at, say, $40. I ended up with a short stock position in my IRA. My long had a strike of $30, so I was covered. But the temporary short stock position in my account resulted in a margin call on my Blackberry in TJ Max on a Sunday. Not a pleasant experience!

__._,_.___
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.

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Posted by at No comments:

RE: [TheOptionClub.com] General ratio spread inquiry

 

Short wrangle

-----Original Message-----
From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
Behalf Of asdfffg1
Sent: Friday, August 28, 2009 6:53 PM
To: OptionClub@yahoogroups.com
Subject: [TheOptionClub.com] General ratio spread inquiry

If XYZ is at 50, and a call ratio spread and put ratio spread are
created using the same month expiring option contracts, what is this
combination called? Is there even a name for it when ratio spreads are
combined, or is it simply two basic trades? An example is below. Thanks Guys

XYZ at 50
Trader buys one Dec 2009 ATM 50 call and sells two Dec 2009 55 calls. The
trader then buys one Dec 2009 ATM 50 put, and sells two Dec 2009 45 puts.

------------------------------------

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.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
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Posted by at No comments:

[TheOptionClub.com] what happens when a debit spread expires out of the money?

 

credit spreads that expire out of the money give me the money in the spread at expiration, what happens with a debit spread?

__._,_.___
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.

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Posted by at No comments:

Re: [TheOptionClub.com] General ratio spread inquiry

 

Looks like a 45/50/55 reverse iron butterfly plus a short 45/55 strangle.

Unlimited risk. Needs to be monitored carefully.





From: asdfffg1 <joshuas7@hotmail.com>
To: OptionClub@yahoogroups.com
Sent: Friday, August 28, 2009 7:53:18 PM
Subject: [TheOptionClub.com] General ratio spread inquiry

 

If XYZ is at 50, and a call ratio spread and put ratio spread are
created using the same month expiring option contracts, what is this combination called? Is there even a name for it when ratio spreads are combined, or is it simply two basic trades? An example is below. Thanks Guys

XYZ at 50
Trader buys one Dec 2009 ATM 50 call and sells two Dec 2009 55 calls. The trader then buys one Dec 2009 ATM 50 put, and sells two Dec 2009 45 puts.


__._,_.___
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
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Posted by at No comments:

Friday, August 28, 2009

[TheOptionClub.com] General ratio spread inquiry

 

If XYZ is at 50, and a call ratio spread and put ratio spread are
created using the same month expiring option contracts, what is this combination called? Is there even a name for it when ratio spreads are combined, or is it simply two basic trades? An example is below. Thanks Guys

XYZ at 50
Trader buys one Dec 2009 ATM 50 call and sells two Dec 2009 55 calls. The trader then buys one Dec 2009 ATM 50 put, and sells two Dec 2009 45 puts.

__._,_.___
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
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