Best option position for downside bias

Discussion in 'Options' started by TskTsk, Oct 27, 2012.

  1. I hate generalizing about strats on a ghost ticker...... what's the ticker..... dont think naming it on et is gonna blow the trade
     
    #21     Oct 27, 2012
  2. mutluit

    mutluit

    As others pointed out: some important parameters like timeframe etc. is missing.
    For a timeframe of 2..8 weeks use this:
    Just buy OTM plain vanilla put options (t=30..60 days)
    And since you are sure it has to fall, then buy even more should it unexpectedly rise and your position lose more than 50%.
    Just repeat it until you succeed. Ie. do the math to be able to repeat this averaging down strategy 3 or 4 times.
    If still no success then your "99% certainty" wasn't correct...

    :) true
     
    #22     Oct 27, 2012
  3. It's always that damn 1% that gets you
     
    #23     Oct 27, 2012
  4. I assume he thinks he is getting inside info from a friend of a friend, who knows a friend.
    Hence the super secrecy and 99% certainty.
    Hope he is right, because I have a feeling he is betting the farm on it.
     
    #24     Oct 27, 2012
  5. What's the ticker and timeframe.....
     
    #25     Oct 27, 2012
  6. Daring

    Daring

    Share the instrument for advice :D
     
    #26     Oct 27, 2012
  7. Exactly.... so many people start threads then stop participating.... and as we'll they don't give specifics
     
    #27     Oct 27, 2012
  8. mutluit

    mutluit

    Here are some candidates for buying OTM/ATM puts of the following
    underlyings for a timeframe of 1..8 weeks (or shorting the underlying):

    RCL BAC SIRI DB IP MSFT SI PRU BX YHOO SAP CHK BCS SAN PAAS C GOLD HL PAG JPM HBC PHG CCE

    I use 2M options, shorter is ok too, but is riskier / more "volatile".

    My advice: it's better to buy the puts only after an up day of the underlying--> reduces risk
     
    #28     Oct 27, 2012
  9. What are your parameters that came up with those tickers. Lotta financials.... do you include vol in your considerations....
     
    #29     Oct 27, 2012
  10. it actually aint that bad of a strategy

    just buy puts on anything everybody is talking about

    especially after an up day

    like the man said, "The most you can lose is all you invest."

    (gotta watch out though for those sneaky put sellers who run the actuarial tables on you.)
     
    #30     Oct 27, 2012