Well at least we agree on something? ( grin ) Your $60 figure for a strike is what I am working with. Probably didn´t arrive with that conclusion, like however you got it. I did it by trial and error about a year ago. Normally, I use a round figure of six cents x the number of decimal ticks within a strike movement as a rough price figure to expect. Without figuring on volatility. It seems to work fine and that would indeed be $60 per strike movement.
I pulled that number out of my ass! It's purely hypothetical! Please accept Emilio's kind offer of sending you the Natenberg PDF.
Well after checking the option chain, I do believe we are running out of premium increases. Seem to have stalled out on the 67 CALL at $2.86, or $2.87 and time is slowing down for the market action. I´m going to wait for the next hourly update and then if nothing is happening close them out. Even though I do show there will be more index upside later today. Yes I did learn that over the weekend, that the highest VEGA is at the strike price. The vega has already dropped to .12 from .13 whatever that means now? But it did that .30 ticks ago and the premium kept increasing in my smaller trading time frame.
Well after deducting my PUT I closed yesterday for an $80 loss with commission. I closed my two trades out, entering staggered going up, for NET PROFIT of +$115 after clearing commissions and the bid spread ask. I kind of learned from this experience, that I need to enter bigger numbers of contracts at the beginning. Rather than stagger into them. My account went up according to TOS from $7320 to $7435 plus a few cents. Next thing, when the index peaks is to maybe put a paper trading calendar to see if selling premium might make some money?
Falcon, you really need to read some GOOD books on options rather than just read what atticus is saying. At least some elementary ones just so you understand the basic greeks- delta, gamma, theta and vega. When atticus said vega peaks at the strike price, did you understand what he meant by that? Which strike was he referring to? And if you have ThinkOrSwim, you should clearly be able to see which strike- I'm assuming you're still using the web-version. Use the Desktop version of ThinkOrSwim for the last gazillionth time! And if you provide me with your email address, I'll chop up the Natenberg pdf book into 6 different pieces (to reduce file size when emailing). I'll name them properly too- so you dont get confused. If you have hotmail or gmail (please no belize-mails. Those local email providers cant handle large file sizes...) If you dont have the basic education out of the way, you wont ever understand what atticus or, heck, even I- a newbie, is saying. It's normal to gloss over tiny details when talking options... especially since there's so many variables. It's like telling a joke- if you're good you can get to the punchline quickly. If you suck, well, you just suck... Atticus did gloss over some tiny points but you should've been able to pick those up quick. Trust me, if you wait for a month, the probability that you make some stupid trade between now and then because atticus mentioned it only to explain something and you thought it was a juicy trade, forget "volatility bubbles", your personal bubble could burst and you'll join the ranks of Howard Cohodas and others... I googled belize and this is what I get in image results: Man, at 75 something, if I was in Belize and still with a wife, I'd rebrand myself as: PIMP I wouldn't bother trading at that age. Period. I'd go to the beach and enjoy the young "bubbles". But regardless, you're very passionate. So Pm me, give me your email, and don't make another trade- paper or real, till you've read the books. simple!
babutime HAh! HAh! HAh! on the photo. Those were the days. One of the side benefits of living here and dealing with tourists. Unfortunately nowadays I´m too old. Mind you I can look, but thats about all. And remember of course. On any given day, there are a 100 like that here on holiday looking for a fling. Most tourists fall into the late teens, early twenties age bracket . 85% of tourists are female as well. I remember after the Korean War, that I met this GI ex-marine at the Banff School of Fine Arts. There were about 200 girls to six of us guys. He was studying ballet. I asked him why ballet. He said, look around buddy, thats where the girls are. Too true! Now if you had to choose between a profession and making a $100 million and or dealing with tourism, were a horny male was in high demand, which life course would you choose? ( grin ) my email is hillviewhacienda@yahoo.com I did not bring my printer with me, and neither my wife or I brought a flash drive either. So I guess will just install in on MY DOCUMENTS on the computer. Good photo.
I see the premium went up still. I forfeited about $60 here, because I allowed myself to get flustered by the criticism and kibbitzing. It´s nearing the end though. All that talk about VEGA confused me. In actual fact, the reduction of VEGA from .13 to .12 was a good sign for continuing the trade in hindsight, after I already exited. In trying to understand what was being said, I just let myself get impatient and closed the trade too early. Ahh well! Next time will know better than to post on here. ( grin )
on your other thread you made money buying a straddle. You were long vega and therefore when volatility expanded/rose you benefitted. An example would be the near month goog strike would see an increase in vol near earnings. You have to try to stay on one concept at a time. Just chew on this and don't overthink it... "Vega represents the amount that an option contract's price changes in reaction to a 1% change in the volatility of the underlying asset. "