Plain Vanilla Options Trades.

[SOCRATES]

While we are waiting...all of you sitting in the gallery watching...

Please can I have your votes ASAP as to whether the writer has the edge or the buyer...Thank You.

 

[SOCRATES]

Latest in...filled at 132..Thank You. (trade B)

 

[SOCRATES]

Latest...

Another one on the cards because of market conditions:~

Same option...Writing another 5 FTSE 6025 puts @ 131..pending..

This one will be trade B

( 5 X 131 X 10 = £ 6550)

now waiting.....

This just having been filled at a price better than expected.

(5 X 132 X 10 = £6600)

 

[SOCRATES]

Lord, and you are the one to tell him?

And don't be rude and personal to your elders and betters while you are at it.

 

[Crap Buddist]

I'll go with writer, but Ive very limited knowledge on options, just concepts and a sense that I'd imagine the game is setup so those who know what they are doing are receiving cash from the off

W.

 

[SOCRATES]

While we are at it....the current ask price of the June FTSE INDEX 6025 put is 136.5

This is posted for the benefit of anyone who thinks buying is a better bet.

 

[SOCRATES]

I'll go with writer, but Ive very limited knowledge on options, just concepts and a sense that I'd imagine the game is setup so those who know what they are doing are receiving cash from the off

W.

Yes exactly. Watch me proceed to wipe the floor with my detractors...

 

[Crap Buddist]

Yes exactly. Watch me proceed to wipe the floor with my detractors...

Best of knowledge.

What about for the writer, freak events, say anthrax spores are pumped out in london or something, is it not better to hedge from the off with a few short futures contracts, or is that risk of not hedging a risk worth assuming generally?

 

[SOCRATES]

Best of knowledge.

What about for the writer, freak events, say anthrax spores are pumped out in london or something, is it not better to hedge from the off with a few short futures contracts, or is that risk of not hedging a risk worth assuming generally?

The news has got nothing to do with price development.

All these things are planned in advance, including the sudden appearance of black swans round the corner, so there is no need to fret and worry unecessarily.

Remember what deacon S.V. White replied to the tipster.

 

[SOCRATES]

............in that quiet meditative way of his as he peered at him over the rim of his gold rimmed glasses....you know exactly what I mean....

 

[Crap Buddist]

The news has got nothing to do with price development.

All these things are planned in advance, including the sudden appearance of black swans round the corner, so there is no need to fret and worry unecessarily.

Remember what deacon S.V. White replied to the tipster.

No I didn't is it in the options thread? I'll go have a look if it is.

Thanks in advance.

 

[paulf]

W

Good luck Socrates.

paulf

 

[trendie]

In order to understand the logic behind the trade, do we need to know about "open interest" at all?

Or, where the greatest number of options are held at a certain price, to determine where the pressure is put to prevent prices going beyond a certain point?

Or, the micro-managing reasoning that led you to believe that a certain price was better than another ?

 

[SOCRATES]

No I didn't is it in the options thread? I'll go have a look if it is.

Thanks in advance.

No no ...it is in the Reminiscences of a Stock Operator by Lefevre....standard textbook reading for anyone interested deeply in trading and investing. Classic. I strongly recommend you read it/

 

[Jack o'Clubs]

CB,

The book is here as an e-book - link is to the section Socrates is talking about.

http://www.daytraderworld.com/trading-ebooks/reminiscences-of-a-stock-operator/chapter-7.html

 

[SOCRATES]

Stand by....

Next one...this one is trade C

Writing March FTSE INDEX puts 5975.

current price yo yo ing a little bit......

We want to nail them at a good price....he he...

Writing ...expected at 59....down to limit 56.....working....u have to wait..

 

[SOCRATES]

Results:~

Written 5 FTSE 100 INDEX puts March expiry...trade C ( 5975 strike)

Here are the details:~

Filled this instant @ 57...all five lots. Denomination £ Sterling. ....Thank you.

(57 X 5 X 10 = £2850= )...going out to you live.

 

[Profitaker]

Best of knowledge.

What about for the writer, freak events, say anthrax spores are pumped out in london or something, is it not better to hedge from the off with a few short futures contracts, or is that risk of not hedging a risk worth assuming generally?

Hedging "from the off" with short futures has the effect of turning the position into a short straddle. Short Puts + Short Futures = Short Straddle.

 

[CYOF]

Hedging "from the off" with short futures has the effect of turning the position into a short straddle. Short Puts + Short Futures = Short Straddle.

Aha, and did you cast your vote yet Wizard of ODDS -let me check?

And what about my post#411 - is that now gone by the wayside?

Socrates, remember "happy are those who have not seen yet believe".

If you keep this up we will have to call you -SOCRAMIDAS

And not one bit of Buying - hmm, makes you THINK, NO

 

[Jack o'Clubs]

Socrates,

Nice thread - good to see a philosopher also happy to demonstrate practicalities By the way, my vote is unequivocally W, but only in the sense of it being the lesser of two evils. To my mind buying options is a mugs game, but writing them is only marginally less so if done in small scale. A bit like offering insurance policies really - all very well if you're Norwich Union, less sensible if you're doing it yourself for the neighbours in your street.

Assuming these are unhedged, I can see a range of scenarios that pushes FTSE down 3% plus your premium between now and June 15th... They may be unlikely, but 'guaranteed' not to happen? Hmmm. I wouldn't be buying your puts... but I wouldn't be selling them either. Just can't see the risk/reward stacks up.