Option strategies

This is a discussion on Option strategies within the Futures & Options forums, part of the Markets category; FWIW: Sold 5175Jul Calls at 18 (currently 15-16). I am rubbish at calling market tops but I might scale in ...

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Old Jun 17, 2005, 3:37pm   #1
 
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FWIW:
Sold 5175Jul Calls at 18 (currently 15-16). I am rubbish at calling market tops but I might scale in if we continue to rise,on the basis that 5150 is a huge Fib level . On the other hand,if we see another 100 point drop on Monday I'll be selling puts. I really would NOT want to be long this market,as option prices are saying we are headed south. As usual the market confuses,frustrates,delights,but ultimately puts food on the table.
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Old Jun 17, 2005, 5:12pm   #2
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Windlesham...

I've also been writing FTSE Calls for July. I wrote some 5125's last week which paid 22 and then I wrote some 4925 Puts (during weakness earlier this week) which paid 18. Today I wrote some 5175 Calls but did so a tad early and only got 12.

Very strange today on FTSE if you ask me.

Steve.
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Old Jun 17, 2005, 10:30pm   #3
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Wind, Steve,
You 2 guys are brave in writing naked so close to mrkt levels.
I'm xpecting a pull back, for this reason i bought some julys 4925 puts at 9 pts. [they are now showing 13 to buy] I say this cause I believe the mrkt is ripe for profit taking.

Fc,
I like your catastrofic stops Hows the margin doing on those shorts? May i suggest a small tip? dont add to ur shorts just BUY some july puts insted, there is no margin to pay at all.

Fantastic week end to all!

Bull

Last edited by bulldozer; Jun 17, 2005 at 10:49pm.
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Old Jun 18, 2005, 7:20am   #4
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Bulldozer....

Yes, we are quite close to market levels with those Calls but I've personally got a 40 point premium when you consider the Puts which I've also written. I also play the futures intra-day in a roughly corresponding size. Today was good as I managed to scalp a further 23 points on the upside move. This means that 'psychologically' I now see my breakeven level up at 5188. If we didn't happen to get that high then I would 100% hedge the Calls and then write some further Calls for a higher level again.

I would suggest that your Puts are rising in value because the implied volatility is rising. FTSE has been a bit of a sleeping dog of late so a 50 point intra-day move was always going to push the price of all options higher.

Have a good weekend,
Steve.
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Old Jun 18, 2005, 10:58am   #5
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Quote:
Originally Posted by stevespray
Bulldozer....

Yes, we are quite close to market levels with those Calls but I've personally got a 40 point premium when you consider the Puts which I've also written. I also play the futures intra-day in a roughly corresponding size. Today was good as I managed to scalp a further 23 points on the upside move. This means that 'psychologically' I now see my breakeven level up at 5188. If we didn't happen to get that high then I would 100% hedge the Calls and then write some further Calls for a higher level again.

I would suggest that your Puts are rising in value because the implied volatility is rising. FTSE has been a bit of a sleeping dog of late so a 50 point intra-day move was always going to push the price of all options higher.

Have a good weekend,
Steve.
Steve,
Thanx 4 ur reply.
What u have is in fact a Short strangle [naked] very close for comfort. This is not so bad if ur doing just a few, i hope u dont have too many.?
If mrkt drops by more than 80 pts u'll be on margin call, if it continues to drop the marg will get more heavier [larger] if this happens i supose u can always convert into a Put bull sprd by using the prem's uve taken and close out the calls for peanuts.
Why not do a short naked strangle far out [say 3-4 mths away] with the strikes far OTM for more prem's and less stress and hassle with less adjustments and a saving on commissions and with less marg and more contracts = more profits and more free time to enjoy life away from the mrkts.
Just my opinion 4 what its worth

Bull
Let the theta work for you while you enjoy life. Milk the THETA and STRANGLE the MM
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Old Jun 18, 2005, 10:59am   #6
 
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Windlesham1 started this thread At last -some sensible option players. vol has been as low as 7% on P&Cs I have a long put spread,as I see support at 4900 and massive support at 4800. hoping for a good week for selling puts,but happy to sell more calls. I just trade what I see,but if I were asked to comment on this market,I'd say this is panic buying,and those champions of the losing trade, the fund managers, have been told to 'Get on with it' . Volatility is much better on SPX,but of course margin is so much higher,to discourage the small players.
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Old Jun 18, 2005, 11:12am   #7
 
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Windlesham1 started this thread dozer: Never write far dated stuff-it'll bite yer bum. You can adjust near month,and generally roll up/down/and take in premium-eg sell 5 near month and they go against you,sell 10 or more in next month and so on -it's all a question of who has enough margin. Sadly for us there are now too many option writers-I've been doing this for some years,and watched many players get blown up,and survived a few horrible times myself. Happy trading.
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Old Jun 18, 2005, 11:20am   #8
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================================================== ======
Your quote Steve,
I also play the futures intra-day in a roughly corresponding size. Today was good as I managed to scalp a further 23 points on the upside move.
================================================== ======
It seems to me that ur using ftrs as a form of hedge on ur options positions, if u make a loss on the ftrs this will wipe away all the profits generated from the Options strangles and your back to square one again with the broker as the real winner having pocketed all those commissions.

Just my opinion 4 what its worth

Bull
Let the theta work for you while you enjoy life. Milk the THETA and STRANGLE the MM [/QUOTE]
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