30 x 10 strategy

[wasp]

THE 30 X 10 STRATEGY.

Write 30 SEPTEMBER contracts ATM PUTS on DOW.

Sell 10 near month FUTURES contracts on DOW.


The strategy can be done at a CREDIT

1. If DOW moves UP its a WIN!

2. If DOW moves DOWN its a WIN!

3. If DOW moves side ways its a WIN!!

Theta works in my favor whatever the DOW does!!

Profits will be over 1,000%% in 4 weeks!!

Coments anyone?



(PS: NOT my own work!)

 

[trendie]

THE 30 X 10 STRATEGY.

Write 30 SEPTEMBER contracts ATM PUTS on DOW.

Sell 10 near month FUTURES contracts on DOW.


The strategy can be done at a CREDIT

1. If DOW moves UP its a WIN!

2. If DOW moves DOWN its a WIN!

3. If DOW moves side ways its a WIN!!

Theta works in my favor whatever the DOW does!!

Profits will be over 1,000%% in 4 weeks!!

Coments anyone?

could you provide a link to the prices for these options? CBOE?
could you give some info on the comms costs and when the FUTURES expire?

EDIT: pedantry alert!
re: Coments anyone?: learn to spell comments properly.

 

[JTrader]

THE 30 X 10 STRATEGY.

Write 30 SEPTEMBER contracts ATM PUTS on DOW.

Sell 10 near month FUTURES contracts on DOW.


The strategy can be done at a CREDIT

1. If DOW moves UP its a WIN!

2. If DOW moves DOWN its a WIN!

3. If DOW moves side ways its a WIN!!

Theta works in my favor whatever the DOW does!!

Profits will be over 1,000%% in 4 weeks!!

Coments anyone?

Hi sweepylongbananafiend

I don't really understand how it works. You'd need to explain it further.

 

[Hoggums]

Yes -

If the Dow moves up or down BIG before contract expiry you lose BIG !

There are unlimited losses on the both sides with this strategy. This is effectively a limited volatility play - at a time when the market is at it's most volatile! Stunning strategy!

 

[JTrader]

Yes -

If the Dow moves up or down BIG before contract expiry you lose BIG !

There are unlimited losses on the both sides with this strategy. This is effectively a limited volatility play - at a time when the market is at it's most volatile! Stunning strategy!

Although i dont really understand it, it sounds like a loser - instinctlively. A bit like one of those eg -

buy 10 lots GBPUSD with FXCM, sell 10 lots GBPUSD with Oanda on NFP day (effectively hedging a bet, but you surely lose because you are paying the spread - twice!).

I don't know, i could be wrong...i wonder what Albie would make of it...

 

[shadowninja]

Yes -

If the Dow moves up or down BIG before contract expiry you lose BIG !

There are unlimited losses on the both sides with this strategy. This is effectively a limited volatility play - at a time when the market is at it's most volatile! Stunning strategy!

I knew there'd be a catch. That's why I don't like such fire-and-forget trading methods. What's the difference between a drawdown and a complete and utter failure of a method? (Check out that Daily20pips.com.)

 

[MrGecko]

A few points

i - why write puts on the index, and sell futures on the index? Surely writing options on the futures, and selling the futures - or writing options on the DIA and shorting the DIA - is a more intuitive way to go about things?

ii - moreover, why bother with the underlying at all? far easier IMO to write calls instead - i.e. go with a recognised short straddle, simple and liquid.

I suspect there is some attempt to delta hedge the short put position with the futures on the underlying, but I can't make the numbers work; the delta of an ATM DIA put is about 0.5, and the delta of a YM future is $5, so the put : future ratio is much more like 1:10

To surmise

Archaic instrument selection + dodgy delta hedging + claims of outrageous returns = Bullsh!t

 

[JTrader]

THE 30 X 10 STRATEGY.

(PS: NOT my own work!)

Was there a clue in the choice of colour selection !