Options and strategies have been written about for a long time, are you saying don't trade any options, or only the strategies that have never...
You put on a calendar spread with the stock at 27.50, the IV is 55. Sell the March 30 call for .90 and buy the April 30 for 1.35. By March...
Jack Hershey wrote: Market pace. I trade a fractal that represents the market pace. I also watch the next fastest fractal for anticipation....
You are correct and thank you for the explanation. The lock to arb a price difference is a conversion, what I explained becomes a conversion...
Iceman, Long ABC at 60, Long March 65 put 5.75. Your risk is .75 no matter where ABC is at expiry. At 50 you exercise your put and sell for 65=...
Lobster wrote: Check the quotes, you will find that this exact scenario has already been factored in by the markets: Market value of short put...
Riskless, To turn the long stock, long put into a conversion you need to be long an ITM put, more intrinsic value and less premium. The OTM put...
You have to be a mighty good stock picker to make a conversion/reversal work without having the benefits of being on the floor. If you...
It can take some time for a trader to learn the markets. Example: I can walk up to a piece of heavy equipment (let's say a track-hoe) and look at...
I understand what you mean now. Doubtful the call would be 1.25. The example was to point out theory and I used convenient numbers to explain...
GATrader: There were 2 examples on this thread: If you are long ABC stock at 30 and long a 30 put for 1 1/2 and the stock goes to 26, and...
IndexTrader wrote: So your intent would be to repeat this process over & over? Yes, because it lowers your breakeven so far for only .25 more...
AAA wrote: I don't pretend to be an expert on this type of analysis, but my experience as a trader is the first loss is usually the best one....
Quote from patefern: If you are long ABC stock at 30 and long a 30 put for 1 1/2 and the stock goes to 26, and the 30 put is now 5 1/4 and the...
AAA and Index, you are correct about the costs, and like everything else there are drawbacks and benefits to everything. As to being confident...
Probably nothing if up 1, want the theta to work on the short call. Using the XYZ example, if the spread was up 3, stock at 32. Depending on a...
Cover the short call. Can't think of anything else without adding more risk trying to salvage the position. I didn't have an answer to the...
Are you saying that no matter what happens to a stock or option position that goes against you it is better to not buy/sell options as a hedge?...
Not in love, have no position in any spread gone wrong at this time, XYZ just an example. Just like being prepared, knowing what to do if X...
Yes, "a plan" is what I am trying to formulate. Preserving capital is vital and because of the versatility of options with different strikes,...
Separate names with a comma.