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babutime
Registered: Feb 2012
Posts: 451 |
04-10-12 08:59 PM
Quote from falconview:
Reverse Iron condor
______________________
New one, 3 strikes OTM
Buy 645 C @ $13.80
Sell 650 C @ $11.60
Spread -$2.20
Buy 615 P @ $15.60
Sell 610 @$13.20
Spread - $2.40
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Paper Experimental trade
Wonder what this is supposed to do? I guess you would want one side, to widen, A LOT. Vaguely remember something about this? Think it can only widen to $5 maximum? So you close it when the OPENING jumps, in GOOGLE?
the only thing is, you'll have to wait alomst till the end of trading session to make ANY decent profit from this trade (assuming you're trading the weeklies?)
Here's a hint: Don't just look at the PnL at expiration. Everything that happens up to and before expiration is probably just as, if not more, important.
Wait, are you even looking and drawing the PnL charts?
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ForexForex
Registered: Jun 2009
Posts: 888 |
04-10-12 09:09 PM
Quote from falconview:
Reverse Iron condor
______________________
New one, 3 strikes OTM
Buy 645 C @ $13.80
Sell 650 C @ $11.60
Spread -$2.20
Buy 615 P @ $15.60
Sell 610 @$13.20
Spread - $2.40
___________________________________________
Paper Experimental trade
Wonder what this is supposed to do? I guess you would want one side, to widen, A LOT. Vaguely remember something about this? Think it can only widen to $5 maximum? So you close it when the OPENING jumps, in GOOGLE?
Maximum profit is $0.40, risk is $4.60. Back to the drawing board.
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newwurldmn
Registered: Apr 2011
Posts: 2622 |
04-10-12 10:36 PM
Quote from babutime:
You're not expecting the APR montly to lose much vol after earnings? That is my primary concern.
I'll still probably make a decent profit. I just dont wanna lose 20+ vol points on my long options... That would suck.
Those options are going to get pummelled. I don't intend on being in them past thursday 3:30.
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newwurldmn
Registered: Apr 2011
Posts: 2622 |
04-10-12 10:38 PM
Quote from falconview:
Do you really think Delta Hedging works?
I΄ve tried it twice only, but it has been disappointing. Now I΄ve forgotten how to calculate it. Going to have to read up on it again.
I΄m trying overlapping calls and puts, but the moves are too shallow. Not even making bid ask and commissions. Making something, but short of any profit.
It can work. But you generally need a lot of size in notional terms to make it interesting.
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falconview
Registered: Jun 2010
Posts: 1465 |
04-11-12 02:57 AM
Well we are sure getting some decent debate in here, about these things.
- No! I do not know what a Pnl chart is, or how to go about it.
- There is more down indicated tomorrow. Does that mean GOOG will have disappointing earnings?
- I liked that part about the Delta Neutral stuff. Size makes it work, he says. I could see that, but not with my little account.
Delta neutral sounds like averaging, but with a way of judging the exact amounts of contracts to make it work, one day.
Long, Long ago, once upon a time, I traded stocks. Made money but not enough to make a living off it. I tried a method called buying 10 best paying dividend stocks, blue chips. Can΄t remember it exactly now decades later. Out of the 10 chosen, you picked the middle 5 to buy. It worked, and you made about 20% on moves over a month or so. You repeated, but the system had say 3 winners and 2 dogs. Eventually I ended up actually making money enough to throw away the dogs. Not much but it was a profit. Not enough to make a business out of it on a small account. Having Scotch genes somewhere back in my ancestors, I never threw away the dogs. I always remember averaging them for 9 years, but finally did get them to pay off a small amount.
Anyway, I΄m against averaging at any time. Works occasionally, but not enough to work 100%
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kinggyppo
Registered: May 2006
Posts: 5837 |
04-11-12 03:31 AM
Falcon a delta hedge can be different from delta neutral, it is not averaging.
If you were long 1,000 shares of stock and you wanted to hedge, you could sell options against all or part of the position. Newworld said he was hedging, not sure what the position is.
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