Maximum Profitability

Discussion in 'Options' started by Seven, Sep 23, 2002.

  1. Seven


    I have a medium amount of futures and stock investing experience taking positional/discretionary trades.

    One interesting set-up is a correlation study that has a 90% correlation in the interest rate market.

    I was thinking about applying a conservative, inbetween and aggressive strategy using various futures products in regards to this set-up.

    My idea was to use options as part of the aggresive strategy but I am not comfortable with any real edge other than my directional call.

    If I cram studied volatility and relative pricing strategies am I still likely to be a poor options buyer? (Options would be in the 5 & 10yr T-note instruments so from what little I do know there is reasonable volume to get a fair price.)

    This set-up occurs fairly infrequently and it is my best. What would an Elite Trader do?

    (Many thanks to Bone, Old Trader, Metooxx, darkhorse and many others who have generously contributed their experience. I am very much increased by it and thank you.)
  2. Maybe DIM would work if the spread did not kill you; however, my first inclination is the futures are a better bet ...
  3. Seven


    DIM would not have been the 1st place I would have started. Thanks again, I plan to stick with what I know when it comes to real money.
  4. dreamer


    Actually, writing options as a part of a good market neutral strategy is a good plan. There are various ways to limit or eliminate your expoxure to losses.

    Good luck trading to all,

    Bob on Whidbey Island

    "Don't confuse efforts with results."
  5. I almost agreed with my own post above.

    Gotta quit working late ...