Quote from apple_sauce: <<< But what astonishes even more are the stupid examples and a premise PM set up ie. a 250k assignment in a 100k acc. (his example.....(65*4000) in order to avoid closing out the spread trade . Whose to say when a stock is going down it will not continue to drop longer than you are funded . You know Putz when you wake up and see a gap down on your screen and hang in there till experation your puny call premiums are goin to make you whole??>>> I gave examples of strikes from $30 - $70. As those are the general range of strikes Danshirley sets up spreads on. Oddly enough, you missed the point of your own statement when you stated.... "Whose to say when a stock is going down it will not continue to drop longer than you are funded." That being, Dan can't even afford to fund 90% of his trades, even at the strikes he selected.... let alone if they drop. The point being,.... Dan is deprived of even having the CHOICE of buying 90% of his stocks, even if he wanted to give them a chance to recover. He is FORCED to sell for a loss, even if his stocks dip just a couple of pennies below his strike. But the truth is, he is unlikely to ever let his stocks even get close to his strikes, before closing down the trade for a loss. He has to, because he is on MASSIVE LEVERAGE,.... even if he is not aware of it. Because of that massive leverage, he has lost the ability to CHOOSE. He can no longer CHOOSE, whether to buy his stocks or close for a loss. He MUST close for a loss. And that was the essense of my discussion. That because of the MASSIVE leverage spread traders use, they lose the ability to "even consider" any alternatives to closing for a loss. I simply used the hypothetical example of a $100,000 account and strikes of $30 - $70 to show the MASSIVE leverage they might be on via a spread strategy. In the examples I used of investing $20,000 equally distributed into those 5 spreads, the cost of buying them all vs closing for a loss, was ONE MILLION DOLLARS. But the account was only worth $100,000! You can distribute the funds differently for a slightly higher or lower cash risk,.... but the danger, the inability to choose, the massive leverage, the being forced to close for a loss, the risk of having your account wiped out if you don't close early for a loss, and so on, is still the same. Really makes no difference if your risk is $800,000 or $1,200,000, vs the million of my equal distribution of the funds. The point remains the same. Frankly, I'm disappointed that you would enourage Dan to continue investing in a strategy, whose risks he does not fully understand. He has stated a number of times over the past number of weeks, that there is no leverage used with spreads. Hence the reason he stated that he does not keep a cash cushion. His goal is to be 100% invested. I am not saying he should not use a spread strategy. I use it myself. I'm saying don't use it if you don't understand it's risks. Anyway, I am done with this issue. And I am done with Dan. Hopefully you will still be there for him when he needs a loan,... as that day will surely come, when he must make the decision of either being wiped out, or coming up with 10 times more cash than he has. Final point. I used 5 stocks in my example. Same issue whether you use 5 stocks or 25 stocks, as you are still using the entire $100,000.
Do not believe anything Put_Master says. It's 90% fabrication. Why he tells the outrageous lies he does and what drives his feverish preoccupations is a mystery. My guess is a personality disorder... but I'm not a psychiatrist and such a diagnosis requeries an overnight stay at a psych unit. Don't try to argue with him because no matter how many times you detail his inaccuracies he will just continue the same nonsense. He IS good for a laugh. Just to anticipate his response to THIS.... I said I would not post trades here anymore... not that I wouldn't watch over PM's rants. Just a reminder for the non-insane: Fiscal Cliff... http://www.washingtonpost.com/busin...727792-ec86-11e1-9ddc-340d5efb1e9c_story.html
I did NOT enter any GLW short put trades. The price offered for the puts is too low to expect a positive return. i.e. expectation on the trades is negative.
On The Road Again: http://www.youtube.com/watch?v=1TD_pSeNelU I have grown so old while I wasn't looking... these days when I look in the mirror I look just like Willie Nelson. Yesterday I drove down the East Coast from Pennsylvania to South Carolina... Passing through the Shenandoah Valley and over the Blue Ridge Mountains . http://www.youtube.com/watch?v=oN86d0CdgHQ This may well be my last such trip as I just barely made it... but seeing one last time the heartbreaking beauty of the earth I have been blessed to live on made it worth while. When I was young I used to work the ER at Temple U. Medical Center in Philadelphia. For a while my job was to stand outside the ER on weekend nights and greet the 'meat wagons' as we used to call them bringing in trauma victims. Gunshot wounds, bashed heads and broken bones rolled in like just like on MASH. At the end of my shift my greens would be covered in blood and I would feel like shit. I became known for my aggressive approach to try to resuscitate the worst victims. I didn't realize it at the time but some of the residents I worked with really wished I would back off a little. Dead is dead. It's ironic that facing my own time my one hope is to be allowed to bow out gracefully. For you folks here I have one last piece of advice.... get the fuck out of here and do something worthwhile with your time before there is no time left. It will come to you in the blink of an eye. I will spend the rest of the day on a porch over the Wacamaw river watching the fish and beaver. http://www.youtube.com/watch?v=AkO8tSC2k9o&feature=related
amen I'm trying to at least enjoy trading, or don't trade but it's not that easy to change your ways marc
I am not doing any of my 'usual' trades which usually, but not always, involves selling either put spreads or naked puts... but also uses other compound option strategies like Iron Condors. The reason is the Implied Volatility is too low to yield a positive statistical expectaton. i.e. we are paid so little for selling the put and assuming the liability that entails, that we are not likely to make a profit in the long term with multiple such exposures. We need to be paid enough for the puts we write to compensate for the risk entailed. Right now that is not happening. http://finance.yahoo.com/q/bc?s=VXX+Basic+Chart
duplicate: Since Putz_master has ceeded to me the last word I will take it... if just to see if he has the decipline to not reply. I am sorry and appologize to those readers who have been inconvenienced by this ongoing war between Putz_master and myself. The fact that we hate each-other's guts is really no concern of yours. I, of course, believe that the fault lies with him, and he believes the fault lies with me. Maybe we are both right. I have a practical use to posting my trades and use those postings every day. Because of Putz_master's harassment i have moved my postings elsewhere. So it really doesn't matter to me. There are lots of places to post trades. I originally had everybody on this board on ignore and simply posted my trades for my own use and ignored everybody else. That worked fine for me and for everyone else.... but evidently not putz_master. If you don't log in and browse by and look at the board you will see the postings made by all those people whom you have on ignore. Now I had many people on Ignore for a long time (like atticus for example) but they had realized I ignored them and stopped posting their snide, insulting remarks. In the beginning there were indeed a lot of them... as that has been the tradition of this board. When Putz_master arrived a little while ago and started posting here I began to see snide insulting , inaccurate and downright stupid posts about me from Putz_master... and it made me mad. Then I made the mistake of taking Putz_master off ignore and replying to his crap... and in the process replying to other crap as well. Thus I became a 'boardie'.... the thing I dislike most. This was a mistake and resulted in my wasting a lot of time and emotion on rediculous bantering and argueing, which also wasted some other peoples time in the process. In the last couple of weeks this has served no purpose since I am posting elsewhere and I can only attribute it to my extreme dislike for Putz_master and the reluctance to allow him to keep saying, essentially, that he ran me off. This board has never had a 'social' purpose for me, and indeed I don't think I could ever have any respect for anyone who spends his time posting (in a social sense) to this or any other board. My standard reply would be 'get a life'. So it is my intent to stop posting here with this post... and to NOT look to see if anybody is mouthing off ... so I don't get pissed and start fighting with PM, Atticus or anybody else. We'll see if I succeed. (please don't PM me asking to know where I am going as I certainly don't want anyone from here showing up there)
BDX: http://finance.yahoo.com/news/bd-announces-results-2012-fourth-110000973.html http://finance.yahoo.com/q/ks?s=BDX+Key+Statistics http://investing.money.msn.com/investments/financial-statements?symbol=BDX http://finance.yahoo.com/q/bc?t=5y&s=BDX&l=on&z=l&q=l&c=&ql=1&c=^GSPC http://finance.yahoo.com/q/bc?t=5y&l=on&z=l&q=l&p=&a=&c=&s=bdx&ql=1 Trade: June 65/60 bull put spread for $50 Yield = 50/450 = 11.1% in 202 days or 20% annualized Prob = 93.6% Expectation = .936(50) - .02(450) - .05(225) = 46.8 - 9 - 11.2 = 26.6 (copy of trade posted elsewhere.. all posters on ignore)