Discussion in 'Options' started by the_dude, Apr 1, 2002.

  1. Can anyone give me a good scenario in which a collar would actually work, perhaps from a recent trade?
  2. We have used used collars in covered call/put situations where the underlying is say a small drug company, about to get approval/disapproval.

    Stock @ $52
    $55 Call @ $6
    $45 Put @ $3

    Buy the stock, sell the call, buy the put.

    With Collar

    Approval, stock goes to $60, 5.75%+ return.

    Disapproval, stock goes to $25, (7.75)%- return

    Without Collar

    Approval, stock goes to $60, 11.50%+ return.

    Disapproval, stock goes to $25, (40.40)%- return

    We have only used it in a large portfolio of writes, in explosive situations, where we are right a large percentage of the time in picking direction.

    For a small number of positions, there are better strategies.
  3. nitro



    What do you recommend as good options software? Also, what datafeed?

  4. We have all proprietary software, so I am probably not the right person to ask; however I used to use Tradestation, a lot of problems loading all the symbols, can not follow the universe of strikes, lousy technical support, etc..

    We use a combination of feeds, the best one for options is probably Hyperfeed, but very expensive, Real Tick is all right for an inexpensive alternative, just be careful, there option quotes hang up when a lot is going on, ILX is as good as Hyperfeed, just more expensive,
  5. nitro


    Have you heard of OptionVue?

  6. I used to have a copy of it, it is OK; the problem with all of them is they can not crunch 125,000 or so strikes with up to 5 exchanges in real-time.
  7. nitro


    I will have to write my own then.

  8. That is how we got into this.
  9. nitro


    Where are you located? Have you gave any more thought about trading from the Islands?

  10. Chicago suburbs, we are definitely going,
    #10     Apr 2, 2002