Plain Vanilla Options Trades.

[A Dashing Blade]

So, to sum up . . .

Socrates thinks the market will go up because its overreacted to (bad) news - no surprise there, buy on rumour, sell on fact etc.

To make money on this, a selection of puts are written with the majority of exposure being in out-of-the-money June's.

Consider this impossible scenario (if you use a normal distribution curve) . . . a storm hits London tomorrow ==> London markets closed, meanwhile the Chinese Govt decide to float the Xuan and Wall street goes into freefall. London opens 30% off the next day.

Result . . . position gets closed out by broker as margin unfunded.

Couldn't happen could it? (peeps with long memories will appreciate the analagy)

As I said, neither the writer nor the buyer has the edge.

 

[Profitaker]

DB

You forgot to mention that IV doubles or even triples in the tank down ! But I'd save your breath because it's light years beyond "them".

 

[Profitaker]

DB

You also forgot to mention that broker telephones lines would be jammed solid making it impossible to close out / leg / roll any positions. But I'd save your breath because they'd probably have a carrier pigeon on standby.

 

[SOCRATES]

So, to sum up . . .

Socrates thinks the market will go up because its overreacted to (bad) news - no surprise there, buy on rumour, sell on fact etc.

To make money on this, a selection of puts are written with the majority of exposure being in out-of-the-money June's.

Consider this impossible scenario (if you use a normal distribution curve) . . . a storm hits London tomorrow ==> London markets closed, meanwhile the Chinese Govt decide to float the Xuan and Wall street goes into freefall. London opens 30% off the next day.

Result . . . position gets closed out by broker as margin unfunded.

Couldn't happen could it? (peeps with long memories will appreciate the analagy)

As I said, neither the writer nor the buyer has the edge.

My dear fellow thank you for your concern.

To quote Mr Partridge...," When one is as old as I am and you have had as many years in the market as I have...one is grateful to anyone who shows them kindness..." or words along these lines.....If you have not read it and understood it then you have neither read nor understood.

But you see...you are not SOCRATES...you are yourself .......and therefore setting aside your sentiments ...........you are not him...........and because you are not him...you cannot think like him...and what is more you cannot know what he is thinking...as your use of time is different to his...you just have to conform to tick tock time and wait to see what happens.....

 

[A Dashing Blade]

My dear fellow thank you for your concern.

There was genuinly no slight intended Sir and indeed I have nothing but great respect for anyone who makes live trading calls.

However, as I'm sure you aprreciate, my point is that extreme events occur more frequently than the normal distribtion curve would suggest and that readers of this thred should be aware of this.

Chances in a million happen nine times out of ten in the markets.

 

[SOCRATES]

Simple question Bulldozer/CYOF . . . were you trading in Oct 1987?

Isn't this hilarious...isn't this comical ?

He thinks you are bulldozer....:cheesy:...he obviously does...

db is convinced I am Mr. Marcus...or that Mr. Marcus is me...whichever...

...absolutely convinced he is...obsessed with it.....hahaha...

If I were to start posting using shamrocks instead of commas and leprechauns instead of exclamation marks it would be thought I am now you...:cheesy:

Why don't we all have a game of musical chairs and pretend to be each other just for fun....there's an idea to relieve the tedium and have a bit of fun with this....

That is why I am so fond of Alice in Wonderland.and Through the Looking Glass...Lewis Carroll wrote it with chldren in mind......... but inadvertently I think it is the best trading book ever written.

All traders and aspiring traders ought to read it and a have a copy ready at hand at all times in readyness to refer to it quickly as and when necessary.:cheesy: ..."nudge".

You thnk I am joking ? No I am deadly serious, I am.

 

[SOCRATES]

There was genuinly no slight intended Sir and indeed I have nothing but great respect for anyone who makes live trading calls.

However, as I'm sure you aprreciate, my point is that extreme events occur more frequently than the normal distribtion curve would suggest and that readers of this thred should be aware of this.

Chances in a million happen nine times out of ten in the markets.

Yes, seriously now, agreed.

It is a risk and has to be taken into account.

 

[SOCRATES]

DB

You also forgot to mention that broker telephones lines would be jammed solid making it impossible to close out / leg / roll any positions. But I'd save your breath because they'd probably have a carrier pigeon on standby.

Don't be daft...trying to frighten people again with your doom and gloom.

Those things went out with the Ark....in the days when there were only 350 screens in the whole of the City of London and all switchboards operated on toggles and lights.

You are too young to remember any of that, cheeky young whipper snapper !

I will bring Bulldozer back here to deal with you if you are not careful...

Monkeys...Bananas...Nuts...and Horns in the Groin....would you like that ?

No...then keep quiet...and know your place...and behave properly !
Answer the question posted in 411.....we are all waiting..

 

[CYOF]

Isn't this hilarious...isn't this comical ?

He thinks you are bulldozer....:cheesy:...he obviously does...

db is convinced I am Mr. Marcus...or that Mr. Marcus is me...whichever...

...absolutely convinced he is...obsessed with it.....hahaha...

If I were to start posting using shamrocks instead of commas and leprechauns instead of exclamation marks it would be thought I am now you...:cheesy:

Why don't we all have a game of musical chairs and pretend to be each other just for fun....there's an idea to relieve the tedium and have a bit of fun with this....

That is why I am so fond of Alice in Wonderland.and Through the Looking Glass...Lewis Carroll wrote it with chldren in mind......... but inadvertently I think it is the best trading book ever written.

All traders and aspiring traders ought to read it and a have a copy ready at hand at all times in readyness to refer to it quickly as and when necessary.:cheesy: ..."nudge".

You thnk I am joking ? No I am deadly serious, I am.

LouDean sends his apologies, as he is still on holidays in Siberia.

But, he said if we wan't some magic mushrooms for the musical chairs, as he has guaranteed me that they will indeed make you SPIN, then all we have to do is ASK

By the way, Socrates, nice trading today. I will take my time though - one step at a time, for I have a lot more learning to do, and my next class is not until next week, so keep up the good work and keep the FACTS coming.

Ho many do you think will suffice - I would think 10, what do you think?

Regards,

 

[SOCRATES]

LouDean sends his apologies, as he is still on holidays in Siberia.

But, he said if we wan't some magic mushrooms for the musical chairs, as he has guaranteed me that they will indeed make you SPIN, then all we have to do is ASK

By the way, Socrates, nice trading today. I will take my time though - one step at a time, for I have a lot more learning to do, and my next class is not until next week, so keep up the good work and keep the FACTS coming.

Ho many do you think will suffice - I would think 10, what do you think?

Regards,

Well, I am not putting a restriction on it, as for my part I am enjoying this immensely, so serial numbers are no problem, but I want to avoid cramming too much too soon.

The five written today including yours are already out of break even and beginning to slot nicely, in case you had not noticed, in line with expectations.

There are still lots of fence sitters, frightened of committing one way or the other as to whether the Writers have the edge or the Buyers.

See if you can coax ducatti to vote, bless him...he made a brief appearance earlier but shied away...see if you can gently sort of ...you know...get him to overcome his timidity...:cheesy:

See if you can use your good auspices to get Profitaker also to vote, as he has placed me on ignore, you know what I mean....give him a little prod here and there just to encourage....

I have just had a call from Bulldozer who reports he is having a corking day as well and thoroughly enjoying himself...:cheesy: ...and sends his regards to everyone too...he has spent the day up to his usual antics taking the buyers to the cleaners as usual in similar activity.

 

[CYOF]

Maybe dc998 and Profitaker will vote when they answer my post#411.

Here it is again, just in case they forgot where it is

http://www.trade2win.com/boards/showthread.php?t=17620&page=42&pp=10


************************************************************************
Quote:
Originally Posted by Profitaker

Originally Posted by CYOF

Now, can you please explain to us what you mean in 3 a)???

a) Being able to buy back a short option position and then simultaneously sell another (roll) has no bearing on edge. An option buyer has the ability to roll too.

Thank You


Which part don't you understand ?
*************************************************************************
Reply by CYOF:

1. The writer can KEEP the initial CREDIT and ROLL position to another month and take MORE CREDIT when position goes against him!!

2. Your 3a says: "The buyer can do the same"! Now, could you be so kind to explain how you do it WITHOUT incurring MORE LOSES/COSTS and without making further payments in rolling position to another month when position has gone against you - Making further payments on the initial trade?

I think Socrates asked the same question to you a few days ago and you have not replied to it, also.!!!!

*****************************************************************************

 

[zupcon]

Ho many do you think will suffice - I would think 10, what do you think?

You would THINK 10

yes, most amusing

 

[CYOF]

You would THINK 10

yes, most amusing

Well, my dear ZU,

It is an EVEN number, is it not :cheesy:

 

[CYOF]

I will now leave you with the following to consider:

Before you can see the light - You must first open your eyes

Have a nice evening all, and that includes d998 and Profitaker, but do please answer my post#411 and vote here, for we do really want to move on and not waste peoples time.

 

[Profitaker]

CYOF

When you contribute something positive to T2W in general, or to any options thread specifically, in the same way that does Ducati, Splitlink, Zupcon, Dashing Blade, NQR, The Blades, Ian, JoC (sorry if've missed anyone) then, and only then, will I start to take you seriously.

 

[laptop1]

A lot of EGO flying around here.

 

[Profitaker]

A lot of EGO flying around here.

Indeed. Fairly concentrate too, I'd say.

 

[Splitlink]

Profittaker or Socrates:

Not an expert in options, so just feeling my way. What's to stop Socrates setting a futures sell-stop at 6025 to cover him if things start to head south. So no hedge at the outset, but take one out later in the day if the trade starts to go sour - would seem to be the best of both worlds?

In "The Way To Trade" by John Piper, Pitman Press, he suggests just that. But he says that Options are fraught with all sorts of dangers. In fact, he's put me off! I've said that I had tried it a long time ago, not very successfully, and these threads had got my interest started again, but, no, I think I'll pass.

Split

 

[A Dashing Blade]

Isn't this hilarious...isn't this comical ?

He thinks you are bulldozer....:cheesy:...he obviously does...

Yet we havn't had a denial . . . remember that he's been banned at least once for failing to deny . . .

 

[CYOF]

CYOF

When you contribute something positive to T2W in general, or to any options thread specifically, in the same way that does Ducati, Splitlink, Zupcon, Dashing Blade, NQR, The Blades, Ian, JoC (sorry if've missed anyone) then, and only then, will I start to take you seriously. Until then I suggest you GFY.

If you're having problems decoding the above acronym, Soc will be able to help, as I know many a good trader has said it to him in the past. Failing that, PM me for the decode.

Profitaker,

Just to let you know , Bulldozer offered me 3/1 wager - that is my £1k against his £3K - that you would not answer my post# 411 question within 4 days from the date of posting.

The damn guy was right about you once again!!

You have now cost me £1k loss for NOT replying within 4 days!! Damn.

How does Bulldozer know????

So, he has now offered me another wager of 5/1 that you wont give an answer by Fridays close of US mrkts.

Please advice me, should i take the bet or NOT? my £1k against his £5k.

I really do not want to loose again, even though the proceeds from both of us are going to charity, whichever one wins, but I want it to go to my charity.

So, please find it in your heart to give me an honest answer, for this is indeed for a good cause.