Keeping track of deltas

[Profitaker]

“A Nov 5075 ftse put should have a value of about 10 [recieve] = £100 per contract, £1000 for 10 contracts! Is this NIL premium ? Its DOTM by almost 400 pts.” Bull

Yes, and those options have a delta -0.07, Gamma 0.00056 and leverage of x 44.

“A Dec 5025 ftse put should have a value of around 18 pts [recieve] =£180 per contract, £1800 for 10 contracts! is this Nil premium?? Its DOTM by 400 pts.” Bull

Yes, and those options have a delta of -0.10, Gamma 0.00053 and leverage of x 32.

Well, since our little exchange, the index has fallen 200 points, almost 4%.

The Nov 5075 Puts have gone from 10 to (about) 25 Mid.
The Dec 5025 Puts have gone from 18 to (about) 43 Mid.

Nov05 ATM IV has gone from 8.7% to 13.7%
Dec05 ATM IV has gone from 9.2% to 13.9%

I won’t have the SPAN margin parameters until tonight, but I suspect short margin requirement on those options has gone ballistic !

That’s the leverage you’re selling Mr.Bull.

Question for you - If the index drops another 200 points, assuming IV doesn’t change further, what will those Puts be worth then ? Then same question, but IV doubles from here ?

Not having a go at you Mr. Bull, just trying to highlight your “weak” areas.

 

[bulldozer]

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Well, since our little exchange, the index has fallen 200 points, almost 4%.

The Nov 5075 Puts have gone from 10 to (about) 25 Mid.
The Dec 5025 Puts have gone from 18 to (about) 43 Mid.

Nov05 ATM IV has gone from 8.7% to 13.7%
Dec05 ATM IV has gone from 9.2% to 13.9%

I won’t have the SPAN margin parameters until tonight, but I suspect short margin requirement on those options has gone ballistic !

That’s the leverage you’re selling Mr.Bull.

Question for you - If the index drops another 200 points, assuming IV doesn’t change further, what will those Puts be worth then ? Then same question, but IV doubles from here ?

Not having a go at you Mr. Bull, just trying to highlight your “weak” areas.

===============================================================

Well HELLO Mr Profit taker,

I have told you that i will make a profit on those positions before EXPIRY date! And i still stick to my PREDICTIONS! I also offered you a wager of 10/1 ! :cheesy: My $1,000 against your your precious big £100 and you did not take it! :cheesy: Anyway i have decided to re=open my offer to you at same odds! :cheesy: for 48 hours! :cheesy: Plz let us all know if you decide to take the bet? and that you are prepared to pay the money to T2W boys to prove that you have paid! and i will do the same on expiry day of those options!
NOW IS IT A DEAL? or NOT ? The choice is yours Mr Profitaker. :cheesy: I have put my cards on the table!! are you prepared to do the same? I'm a EU style writer and I will win before expiry! READ MY LIPS i said i will win BEFORE EXPIRY!! :cheesy:

Bull

[email protected]

 

[Profitaker]

Question for you - If the index drops another 200 points, assuming IV doesn’t change further, what will those Puts be worth then ? Then same question, but IV doubles from here ?

If you cannot answer this very basic question then you shouldn't be trading options, especially the short side.

On that note..... good luck.

 

[bulldozer]

If you cannot answer this very basic question then you shouldn't be trading options, especially the short side.

On that note..... good luck.

=====================================================================

The BET was not on mrkt flunctuations or margin Mr Profittaker! :cheesy:

THE BET WAS THAT THE WRITER [the reciever] HAS OVER 85 % CHANCE OF MAKING A PROFIT BEFORE EXPIRY OF THE WRITTEN POSITIONS!! :cheesy:

i REPEAT I AM AN EU STYLE OPTION WRITER ON FTSE INDEX :cheesy: PLZ GO BACK TO MY POSTS IF STILL CONFUSED! :cheesy: MARGIN IS NOT MY CONCERN OR THE BET CONCERN OR YOUR CONCERN! Its similar to a spread bet, you only COUNT the loss when trade is closed!! The trade is still open and NOT yet closed!! I will close before expiry at a PROFIT!!! Now is that clear to you!!

NOW FOR THE LAST TIME Mr PROFITAKER DO YOU WANT THE BET OR NOT OR DO YOU WANT TO DROP OUT????? :cheesy: THE OFFER IS STILL AT 10/1
HERE IS YOUR BIG OPPORTUNITY TO SHOW WHAT YOUR BA LLS ARE REALLY LIKE!?

Bull
And always remember!! monkeys that mess with bulls always get BOTH horns sooner or later! and in most cases its sooner rather than latter!

 

[Profitaker]

FOR THE LAST TIME Mr PROFITAKER DO YOU WANT THE BET OR NOT

No. Is that clear enough for you ?

Question for you - If the index drops another 200 points, assuming IV doesn’t change further, what will those Puts be worth then ? Then same question, but IV doubles from here ?

Bulldozer, this is very basic stuff. I strongly urge you to undertake some training, seriously, for your own good.

I can see I've rattled your cage, but that wasn't my intention.

 

[bulldozer]

No. Is that clear enough for you ?

=================================================================

Prof,

Thats loud and clear! youve turned down the bet of 10/1

Now perhaps you can go and do your stuff whatever it is your doing ?? :cheesy:

Also when i need some advice i'll know where to find you!
So DONT call me! or post to me! is this clear to you too!! :cheesy:

Remember IF I need you I'll call you!! BYE BYE!!

and by the way plz dont wish me luck [last post from you] I DONT trade on luck!! or TA, or on mrkt flunctuations or IV % !! I trade on the strength of my account and TIME VALUE!! and when i lose i always PAY-UP!!

Happy trading and happy living and keep buying those premiums!!

Bull

[email protected]

 

[Profitaker]

and by the way plz dont wish me luck [last post from you] I DONT trade on luck!!

On the contrary - if you don't know a very basic options question like this....

Question for you - If the index drops another 200 points, assuming IV doesn’t change further, what will those Puts be worth then ? Then same question, but IV doubles from here ?

Then it is precisely luck with which you are trading. So..... good luck.

Steep volatility skew in the Footsie Nov's today, what do you make of it ?

 

[bulldozer]

On the contrary - if you don't know a very basic options question like this....


Then it is precisely luck with which you are trading. So..... good luck.

Steep volatility skew in the Footsie Nov's today, what do you make of it ?

===============================================================

Prof,

In the same way as a spread better!! Do you hold a losing position or close it?! :cheesy: Most people are NOT totally convinced of their call on directions, they either put tight stops or close out at heavy loss. The real player is certain of his mrkt call on directions and plays his hand like a good poker player!!
I play like the bookie does! i pay when i lose and i hedge if/when i chose!! European style i rarelly lose, cause I'm always able to deal wiv margin-calls!
I dont expect you to understand, cause you dont play to my style or rules or to the strength of account!! :cheesy:

So keep learning! You'll come good in the end. Luck is NOT a strategy! :cheesy:

Bull

 

[Profitaker]

But you haven't answered any of my questions

This one....

Question for you - If the index drops another 200 points, assuming IV doesn’t change further, what will those Puts be worth then ? Then same question, but IV doubles from here ?

Or this one....

Steep volatility skew in the Footsie Nov's today, what do you make of it ?

I'm interested in your opinion.... what do you make of the Vol skew ? What caused it ? and how would you trade it ?

 

[bulldozer]

But you haven't answered any of my questions

This one....

Or this one....
I'm interested in your opinion.... what do you make of the Vol skew ? What caused it ? and how would you trade it ?

===================================================================

Prof,
" if footsie drops 200 pts...........bla bla"

I dont trade on IF's and ON LUCK! I'll leave that stuf for people like yourself! :cheesy:


Opinion? Vol skew? and what caused it? IS NOT in my trading strategies! READ MY POSTS AGAIN!! I trade on dffrt rules and dffrt strats to you. I trade on my strengths and on my rules/strats/hedges /account strength to take money out from other players accounts!

Like i said, keep learning yu'll come good some day! Remember that 90 % of option traders LOSE and less than 10 % win and a small % break-even! These data/figures/percentages is also part of my rules

Bull

 

[Pitscum]

numpty's post

whilst you've had your head down the pan for the last drop and coughing up extra margin calls and lost p/l, proper, decent, knowledgable traders have been trading paper like you thats been drummed up by your best mate brokers, executed online having crossed the spread and then assimulated into a portfolio thats then bought and sold a load of other strikes ending up on the day, delta zero, gamma long, vega neutral, decay tiny, but, most importantly quids in. and guess what, when the dow does bounce as you are now preaching, guess what, the boys will clean up then cos they are postioned to make money what ever way the market moves whereas your great little scheme involves making money only if ''it never gets there'' ...............thank god for retail paper like you...it pays for the very nice things in life....every year......ho hum.

ps bull, if its going to rally, sell some more. and as i said before, i cant accept a 'bet' with you for the folowing reasons:

1. have never gambled in my life
2. can see absolutely zero upside taking a one off postion with you because i cant trade anything against it. do you understand this type of trading ?

 

[Profitaker]

SPAN Margin

Short Margin requirements, per contract

Nov05 5075 Puts 2 weeks ago;

Scan............Liquidation.....Total Margin
435.....................95........................530

Nov05 5075 Puts Now;
Scan............Liquidation.....Total Margin
975.....................555........................1530

Margin required has multiplied by almost 3 times

Dec05 5025 Puts 2 weeks ago;

Scan............Liquidation.....Total Margin
540.....................175........................715
Dec05 5025 Puts Now;

Scan............Liquidation.....Total Margin
975.....................665........................1640

Margin required has more than doubled

This following the Footsie falling 200 points in 2 weeks - is that so unusual ?

Shorting far out in time has major Vega risk, and shorting DOTM has major leverage risk. And if you combine shorting far out in time and DOTM is a recipe for disaster IMHO. I’d much rather sell 10 ATM Puts for 50, than 50 DOTM puts for 10. Merely looking at an expiry profile is not enough, you need to look at what can happen prior to expiry. In the above cases massive margin increases would probably mean forced liquidation and massive losses.

I'm not having a go Bulldozer, just pointing out (with real life examples) of how trades can go horribly wrong, occasionally.

If it's any consolation to you, I was net short Puts for October expiry, and needless to say I took a hard whack. But the difference is I understand the risks, whereas you have some way to go.

The purpose of my post ? well, I know that you won't be persauded otherwise and frankly neither do I care, but just in case anyone else decides to follow that strategy, I thought I'd highlight the risks involved, for them.

As always....

Good luck.

 

[Pitscum]

excellent post by profit

fine accurate post by somebody who knows what they are talking about. respect profit. his words are learnt from experience and anyone reading them would do wise to remember what hes said through his posts on here as they can teach you far more than you will ever find in a book or a broker will ever know or care to tell you.

 

[bulldozer]

Profitaker, Scum,

Your quote> "If it's any consolation to you, I was net short Puts for October expiry, and needless to say I took a hard whack. But the difference is I understand the risks, whereas you have some way to go."

===================================================================

You took a "HARD WHACK" [BIG LOSS] Because you havent got the margin or the brains to run the positions.

I offered the pair of you a WAGER and YOU both turned it down!
I would rather write 50 DOTM puts! and hold the positions using some brains with heavy margin!! than doing 10 ATM and take a WHACK>> when positions becomes ITM!!

ATM short puts will have a higher chance of becoming a looser than MY DOTM short put! thats fact! You'v admited it yourself in above post! :cheesy:
The difference between you and me is simple! YOU HAVENT GOT THE CASH [MARGIN] OR THE BALLS TO HOLD POSITIONS! AND YOU HAVENT A CLUE HOW TO REDUCE OR HEDGE POSITIONS WHEN IT GOES atm OR itm.

WOULD YOU PAIR OF NOVICES LIKE ANOTHER CHANCE AT THE WAGER??
i TOLD YOU I WILL MAKE A PROFIT BEFORE EXPIRY DAY!! BUT YOU TWO NOVICES ARE NOT CONVINCED STILL!! OR PERHAPS YOU BOTH KNOW I'M RIGHT AND WISELY REFUSE TO TAKE THE WAGER!? :cheesy: OOPS :cheesy: i forgot Scum does NOT gamble :cheesy:

Stay tuned! time will always tell the facts!! sooner or later!

If you dont have a big POT you should NOT play poker!! Why? cause in majority of cases the player with the biggest POT WINS!!! :cheesy: even with bad cards he still wins!!!
even if he DOESN'T LOOK at his cards he still WINS!! :cheesy: Its to do with 3 things :>
1, Good brains.
2, BIG POT.
3. Good strategy! in this case its called bluffing!!
With the above 3 things and used at the same TIME you establish the EDGE!! over the other players! by putting FEAR and DOUBT in their minds!! it makes them losers before they even recieve the cards! :cheesy:

Bull

NO Bullsh it!!

 

[bulldozer]

Short Margin requirements, per contract

Nov05 5075 Puts 2 weeks ago;

Scan............Liquidation.....Total Margin
435.....................95........................530

Nov05 5075 Puts Now;
Scan............Liquidation.....Total Margin
975.....................555........................1530

Margin required has multiplied by almost 3 times

Dec05 5025 Puts 2 weeks ago;

Scan............Liquidation.....Total Margin
540.....................175........................715
Dec05 5025 Puts Now;

Scan............Liquidation.....Total Margin
975.....................665........................1640

Margin required has more than doubled

This following the Footsie falling 200 points in 2 weeks - is that so unusual ?

Shorting far out in time has major Vega risk, and shorting DOTM has major leverage risk. And if you combine shorting far out in time and DOTM is a recipe for disaster IMHO. I’d much rather sell 10 ATM Puts for 50, than 50 DOTM puts for 10. Merely looking at an expiry profile is not enough, you need to look at what can happen prior to expiry. In the above cases massive margin increases would probably mean forced liquidation and massive losses.

I'm not having a go Bulldozer, just pointing out (with real life examples) of how trades can go horribly wrong, occasionally.

If it's any consolation to you, I was net short Puts for October expiry, and needless to say I took a hard whack. But the difference is I understand the risks, whereas you have some way to go.

The purpose of my post ? well, I know that you won't be persauded otherwise and frankly neither do I care, but just in case anyone else decides to follow that strategy, I thought I'd highlight the risks involved, for them.

As always....

Good luck.

===============================================================

Prof/Scum,
USING the facts above by Profitaker:

1. If my contracts were on same expiry date [Oct ] as his? = ME WIN!! cause mine have NO time or intrinsic value and i get to keep ALL the premiums!

2. Even if the mrkt moves lower or higher or finishes at present levels on expiry?! = ME WIN

3. My positions have NOT yet gone into intrinsic value!!

4. NOT had a margin call yet!!

5. Even if position finishes ATM or OTM = ME WIN!

6. IF? positions finish slightly ITM = ME WIN!

7. IF? position finish DITM = ME WIN!! WHY? cause i have TWO Good reasons! I'LL tell you ONE of them for free! I have a big enough pot to roll positions for FLAT and still KEEP the initial premiums!! SECOND reason will cost you a donation to my favoured charity! :cheesy: But then after you'v made the payment , i would have to shoot you!

Profitaker, You took a "BIG WHACK" cause of the following reasons:-
1. You had a "PUT BULL SPRD" and the written leg finished DITM with a HIGHER value than your holding leg = BIG WHACK!!

2. You had a dgnl put sprd OCT-NOV with the holding leg 50-100 LOWER than the written leg and the written leg expired DITM with a MUCH higher value than your holding leg.

3. You had a naked short put that ended DITM at expiry and you havent got enough cash to payout losses or to ROLL positions on heavy marg you cant afford?

4. You bought many calls ATM, ITM , OTM ,DOTM ! and they ALL expired worthless? :cheesy:

My guess's of your positions are in this order 1,4 2,3, Am i right?? IF not plz tell us what positions/strategy you had? I told you mine! For the benefit of the viewers so they dont repeat your "BIG WHACK" mistake. :idea:

Always expect the unexpected and be ready to ACT when it happens!

Dont WISH misfortunes/losses on others! cause GOD can reverse the wish! :cheesy:
Sincerely sorry to hear of your big whack/loss.

Bull

Cracking weekend to all ! lurkers too !

 

[bulldozer]

fine accurate post by somebody who knows what they are talking about. respect profit. his words are learnt from experience and anyone reading them would do wise to remember what hes said through his posts on here as they can teach you far more than you will ever find in a book or a broker will ever know or care to tell you.

=================================================================

Scum,

Sorry to spoil your fun and understanding :cheesy: I could roll my November positions when the mrkts opens and recieve OVER £250 per contract to add to my account and reduce the margin at same time! and gives me more time to expiry If you doubt me? ask profitaker to get a quote from his broker and see if Im wrong or right? :cheesy:
Rolling Nov's PUT strikes to the SAME strikes on December! :cheesy:

If you want to show your appreciation to this FREE lesson by a genius? Plz give a donation to my favourite charities:- Children in need or Cancer research.

Bull

You dont need to be a genius to have brains! BUT you NEED some brains in the right place to be a GENIUS!!!

 

[bulldozer]

As always, thank you for that useful contribution.

===========================================================

Profitaker,

No problem my friend! Its my pleasure!

I was just wondering? perhaps the name "Lossmaker" is more suited to your style of play? just jokin

Pit Scum,
i forgot to also mention that i get to KEEP ALL the premiums taken initially [Novembers premiums] when positions were opened! [ I thought perhaps this reminder would cheer U up ] :cheesy:
And also i may decide to convert positions at the end of the first week of November! WHY? cause i will then recieve over £300 per contract. Profittaker is good with math and figures ask him if I'm correct with my figures? and strategy? :cheesy: and while your at it ask him also would his broker allow me to do the conversion to Dec's if i was on margin-call on the Nov's positions? or would i need to pump money in first to remove M-call?

Bull

God BLESS the lossmakers! cause without them there will be NO winners !
Ces la vie! Thats life! its fact too

 

[Profitaker]

Keep reading this over and over again, until you understand it.

The purpose of my post ? well, I know that you won't be persauded otherwise and frankly neither do I care, but just in case anyone else decides to follow that strategy, I thought I'd highlight the risks involved, for them.

 

[bulldozer]

Keep reading this over and over again, until you understand it.

=================================================================

Prof,

Thanx again. But i have NOT had a "HARD WHACK" yet! like yourself. Do you have any comments to make on my last few posts?

On your post number 141 you say the following>>"If it's any consolation to you, I was net short Puts for October expiry, and needless to say I took a hard whack. But the difference is I understand the risks, whereas you have some way to go."

"Why do you feel i need any consolation"? Plz explain> "whereas you have some way to go"

My positions are NOT in intrinsic value! and the conversion in 2 weeks WILL bring me OVER £300 per contract and i also keep ALL the premiums taken on the November contracts. Doubt me? then work it out, you are quite good with the options pricing and all the mechanics! If you cant work it out ask your broker monday morning? and plz come back with your sidekick P-scum and tells us your fidings!?

I'm prepared to offer you TWO another wager on the conversion facts i've mentioned. How about $1,000 to your $200

Bull

Without looosers theres NO winners! some things in life NEVER change!

 

[bulldozer]

notice bull only comes online weekends now cos rest of the week hes in the bunker avoiding mr margin man........ho hum.

=================================================================
Scum,

As you'r probably aware this thread has had over 2,000 views so far and i think your posts has dissapointed the great majority I think even Socrates is still very dissapointed wiv your meatless posts? Surely with 5 stars you can do better than that?

Prof/Scum,
Do you have any comments on my posts?? >> 143, 145, 146, 147, 149.

Viewers,
Not everybody is SUITED to be a PUT WRITER on ftse index. Below is a list of things/conditions of a successful PUT WRITER.

1. A short PUT writer is RUTHLESS, CRUEL , MERCILESS AND PITILESS!
2. Is aggressive and demanding. and sticks to his plans!
3. Has a big pot in account and NOT affraid to use a big chunk to protect his trade using margin
4. Is always able to raise more cash for margin if need be.
5. Always has MORE than ONE plan to get him out of a pickle when mrkts move against positions.
5a. Needs to have good knowledge of pricing/mathematics of time value and theta/delta!
6. Has the right brokers with the right rules suited for the strategy! and refuses to put trade with a dealer who makes mistakes on regular basis. He does NOT accept appoligies from dealers.
7. Moves a loosing/bad trade to another unsuspecting player before expiry day.
8. Rarely does he allow a loosing positions to go to expiry day.
9. He trades on his OWN rules, time and conditions against the buyers. :cheesy:
10. He has more than one broker incase a broker goes bust in the event of a mrkt crash or corruption.
11. Always takes profits out every 12 months :cheesy: and has a good accountant.
12. He has to have nerves of steel and does NOT waver from his discipline/discisions and he MUST have patience of a saint.

If you dont have ALL of the above to your advantage? YOU HAVE LESS THAN 1% CHANCE OF BECOMING SUCCESSFUL in trading short Footsie index Put Options! and 99% chance your account will go bust within 2 yrs!
My final advice to ALL viewers is DONT trade short puts! period! full stop!!

Rgrds
Bull

A smart middlewieght boxer does NOT jump in the ring with a heavywieght boxer! Do you know what i mean scum?? :cheesy: I sure hope you do
And plz NEVER forget!! Monkeys that mess with BULLS always get BOTH horns! sooner rather than later!
Final advice to you Scum>> dont trade Options or SB or anything!! just give the money to your 22 yr young wifey to put into premium bonds! they give winnings EVERY MONTH check out channel 4 page 539 [teletex] You may well thank me one day for the tip