Adjusting Collar Options plays

[gsb2006]

Hi,

I am new to both invesing and this forum.

I took an investing class (that included options) and have read a lot (on both book and the internet).

Now, there's one company that seems to specialize in doing Collar option plays (and charges a hefty fee to teach their system). These plays do not seem to be hard to understand, but they claim they provide the expertise in "adjusting" those plays once the stock in question has moved either up or down.

If you can please tell me, what is or could be so hard about adjusting the play? They seem to roll the collars to a different month and strike prices, buy back the calls or sell the puts if and when the stock goes down and a possible gain can be achieved (by selling said puts).

Of course one would have to watch the stock closely to know when to adjust the strategy, but what else is necessary that a beginner like me could miss?

I'll really appreciate your input.

Thanks,

GSB

 

[bgkrider]

You must be talking about SpreadTradeSystems. I have heard their educational webinar, ( just yesterday in fact ). They charge twice what others charge for a two day seminar plus videos to take home.

But they offer lifetime membership. So, it is probably reasonably priced. Of course, after learning the techniques, you dont need a lifetime of assistance.....

I cannot answer your questions but I think the answers can be found if you look around enough. As well as one gets more educated in this you probably can make these judgements intuitively. I am relatively new to all this as well but my take on it is to see what I can learn from reading and networking.

 

[Future Investor]

I'm looking into the same systems GSB2006. From the conversation i've had the "adjusting" aspect of the Spread Trade Systems' methodology seems to be their "Bread & Butter". From the conversation i've had, the collar is one of many strategies they teach that have adjustments, but i'm still looking for some actual input from individuals who have been through their program.

Any luck in this regard? As an option trader/stock investor or 3+ years, i like the idea of being able to repeat classes and continue to work with their experts. I have as much hesitations as anyone looking to embark on a project like this, so any actually member reviews of Spread Trade Systems would be greatly appreciated!

 

[A Dashing Blade]

Looks like these guys specialise in "Rio Spreads"
ie the salesman makes so much commission he goes to Rio on holiday!

Seriosly tho', at the end of the day it's gonna boil down to delta and gamma analysis of the net position.

From thier "Methodology Examples" (work now blocks pdf's so havn't seen them) call calanders I guess are sell near dated calls to part finance long dated are nothing new. Mind your eye on writing straddles tho.

These sort of stratagies always blow up/cause problems when you get the big black swan events and can't dynamically hedge.