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axolotls

Registered: Sep 2012
Posts: 16

09-12-12 04:41 PM

AWESOME! I am part of the 1%.. WOO HOO!!!

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newwurldmn

Registered: Apr 2011
Posts: 2622

09-12-12 05:06 PM

Quote from diaoptions:

Your "joined date" doesn't mean anything. ET has been around longer than 1 week and 99% of the people here are on their 2nd, 3rd 4th or whatever ID.

---

only you and the other trolls.

then again, that might be 99% of the population...

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Twinsen

Registered: Feb 2009
Posts: 44

01-19-13 07:48 AM

I cannot understand why he uses a short butterfly instead of a credit spread (see in his webinar 38th minute)? Stock at 620.

615 -1 5.0
620 +2 0.73
625 -1 0.00
credit received: 3.54

What is the point of using 625 here?

Also it is not clear to me what will happen with this spread later because the short 615 is in the money. Do I need to buy it back or let it expire? And if I buy it back what will be my profit in result?

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RichardRimes

Registered: Oct 2005
Posts: 2528

01-19-13 11:53 PM

Quote from Twinsen:

I cannot understand why he uses a short butterfly instead of a credit spread (see in his webinar 38th minute)? Stock at 620.

615 -1 5.0
620 +2 0.73
625 -1 0.00
credit received: 3.54

What is the point of using 625 here?

Also it is not clear to me what will happen with this spread later because the short 615 is in the money. Do I need to buy it back or let it expire? And if I buy it back what will be my profit in result?

Not speaking for Jeff but I have done some short flys on fast moving stocks. However its usually as an adjustment. Perhaps he wasn't getting the credit he wanted on the credit spread. most people would just buy back the shorts for a nickel rather than closing the entire spread. I prefer doing these on indicies and just let them expire OTM.

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Twinsen

Registered: Feb 2009
Posts: 44

01-20-13 09:54 AM

But 615 short leg is in the money and cannot be bought back for a nickel. It will not lose value unless stock goes significantly below 620 and it is left few hours before market close.

Richard, do you use short flies on expiration day too?

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