FTSE 100 - May

[bonsai]

lol
but by then the calls will be expensive !

 

[Hooya]

Possibility..but either way its a cracking pattern 😎

 

[Hooya]

thanks for the book suggestions

 

[KJH]

KJH,

Surely the higher low is not confirmed until we take out the high of 4427 early this morning.

Your right. I should have qualified the time frame also.
However, from the current intra day low a higher low is in place, is it not, when the swing around 4420 was broken to the upside ? ( basis 5 min)
kjh

 

[bonsai]

hooya
if your options are 15 min delayed, refresh every 2 mins or so and track the volatility

 

[Hooya]

I was going to have a look at 4 to see what the price difference is compare to now and where the index was 🙂

 

[bonsai]

its up to you

but the volatility might scare the pants off you if the futures start moving

 

[bonsai]

ps: dont rely on autoquote

 

[Hooya]

ok...but shouldnt the fact that your risk is limited to thr price you paid on purchasing the option help you stay in a position trade more so than with futures?

 

[Hooya]

pivot is at 29 btw

 

[bonsai]

money management doesnt change just because you change instruments

in many ways options are futures

just more highly geared
which usually means you lose your money more quickly

 

[mully]

Interesting how the FTSE is hugging the breakline from the low last night.

Talk about respecting.

 

[Fluke]

Mully.
Thanks,will look at the 10 mins as well,may suit me better.

 

[Hooya]

"which usually means you lose your money more quickly" LOL we cant be having that!

 

[bonsai]

here comes the tricky bit

 

[Hooya]

btw Ive closed my Long...didnt like that rejection off 29 pivot, might get a better entry later

 

[RogerM]

what confuses me is why have puts and calls as you can sell/buy both but guess there will be explanations in the books I will have to read. Just looking on delayed prices on Liffe; an offer on June 4525 calls is 38 but 4425 is 80 odd you would rather buy the 4425 strike ??? and I assume the closer it gets to exercising date and further away from the strike price(in the money) the more expensive the options become?

oops FTSE on the move I'll stop waffling 🙂

thanks Bonsai also.

Hooya - although you can go short in 2 ways - i.e. by selling calls or buying puts, they are very different strategies. Selling calls "At The Money" will put premium into your account and you'll keep it under all circumstances, but you'll lose for every point that the index rises above the strike price, WITHOUT LIMIT. You can, of course hedge it - you don't just sit there like a frog in a pan of water on the stove - lol. If the index stagnates, then time decay is on your side and you get to keep the premium.

You can also go short by buying puts. Here your risk is limited to the premium paid for the put, and profit will rise as the index falls. But time decay is working against you, and if the index stagnates, or only falls slowly, then the value of the contract will fall and you'll lose.

You can of course do both - sell a call to pay to buy a put - creating a synthetic future.

 

[Hooya]

to add to the Lamborghini pattern and expanding wedge....you never know.. so a few bullish chart patterns appearing now....1 day leveled out. didnt close the gap this morning.

 

[bonsai]

a/d is far too high for this sort of move

as cromwell said - keep your powder dry

 

[Hooya]

explained nicely thanks Roger. Sounds like Options are really for the intelligent ones 🙂