OddTrader
Registered: Mar 2003
Posts: 5271 |
01-20-11 01:53 AM
sonsQuote from atticus:
The collar adds complexity, as you're trading a three way over a two way. Edge loss and additional commissions are not comforting for anyone.
When trading every short timeframe, obviously a 2 legs strategy is the better choice than a 3 legs.
However, there are sevearl other reasons using 3 legs. One of them is liquidity and spread/cost for when the long options becoming deep ITM during the holidaying week for vacationers.
You are welcome to start a new thread to discuss the topic of synthetics (2 legs) vs outright (one leg), or collars (3 legs) vs verticals (2 legs). This same old topic has been discussed in length many times on ET before.
Such as: http://www.elitetrader.com/vb/showt...40&pagenumber=3
Quote from atticus:
I assume it would be traded the same as a long put vertical, no?
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