what about on "200 lot bull position in NDX/short futures against. Max gain of 2.4 on Feb4 and 3.3 terminal." what does that mean?
200 contracts which he has hedged. If the naz takes off he makes $2.40/contract by Feb 4. If he keeps it open and the naz stays up, he makes $3.3/contract at expiration.
It's a poor correlation to NDX. MSFT much bigger impact than TSLA. GOOGL and AMZN are the drivers next week. TSLA's had huge deliveries in the last quarter.
2.4 mil. It's 200 lots of NDX (spread). That's truly best case on LTD and terminally it's a max of 3.3, but I won't get close to that, even assuming a 15,200 pin, as there would be residual value on the Feb4s on last trading day and I won't want to carry the risk of the other tenors once the Feb4 leg goes off.
I for one hope you make your target, because I am a perma-bull, as you probably know. Just a really shitty one that cannot understand the complexities of hedging FOPS.
The only time a pin is possible (pin = terminal value) occurs on serial expirations that settle to cash at the open on Friday (Thursday as LTD).
I understand what he is saying at a 40% level. https://www.elitetrader.com/et/threads/get-long.363639/page-8#post-5530423 He had a huge position looking for that 14150 target. He did not see it at the time, cut it, and re-positioned. He is a better trader than I, but I do understand one thing...He thrives in this high IV-type market. It's like a field of nectar for him, where bees don't sting him...They ask to be stung by him.
This is an incorrect assumption. If I was smart, I would he hedging my open futures trades with FOPS. Since I am not doing that, because I do not understand how to, I am a dumbass.