OddTrader plays ES Collars for vacationers

Discussion in 'Journals' started by OddTrader, Jan 9, 2011.

  1. The collar adds complexity, as you're trading a three way over a two way. Edge loss and additional commissions are not comforting for anyone.
     
    #21     Jan 19, 2011
  2. When trading every short timeframe, obviously a 2 legs strategy is the better choice than a 3 legs.

    However, there are sevearl other reasons using 3 legs. One of them is liquidity and spread/cost for when the long options becoming deep ITM during the holidaying week for vacationers.

    You are welcome to start a new thread to discuss the topic of synthetics (2 legs) vs outright (one leg), or collars (3 legs) vs verticals (2 legs). This same old topic has been discussed in length many times on ET before.

    Such as: http://www.elitetrader.com/vb/showthread.php?s=&threadid=84028&perpage=40&pagenumber=3
     
    #22     Jan 19, 2011
  3. Week 24Jan2011 Short 1280.21
    Sold ATM Put at 19.22
     
    #23     Jan 24, 2011
  4. are you still short the call and long the cash? If I'm following right your position right now is

    -1 1285 call (Feb)@21.47
    -1 1280 put (Feb) @19.22
    +1 Mar ES cash bto 1286.25

    is this correct or did you close the cash?
     
    #24     Jan 24, 2011
  5. Curious as to why you would ever go long futures and long the risk-reversal (option 1)? IOW, why double up when the point is to carry a hard-stop? You seem pretty new to this, so I wonder why the interest in such a limited strategy (in terms of r/r)?

    I was on vacation in Martinique and I don't think I would have been very comfortable doubling-up on ES and leaving my laptop at home.

    You're not very open to questions, so feel free to pass this one by.
     
    #25     Jan 24, 2011
  6. #26     Jan 24, 2011
  7. If you really want to learn how to trade options, go to ask RiskArb for good lessons. Not from me.

    http://www.elitetrader.com/vb/showthread.php?s=&postid=1477416&highlight=RiskARb#post1477416

     
    #27     Jan 24, 2011
  8. lol, as expected. I was not telling you how to trade. A collar is a tacit-hedge, the long spot/long r/r is not. Good luck with the vacation trades.
     
    #28     Jan 24, 2011
  9. http://www.interactivebrokers.com/en/p.php?f=productsEdu&p=f&ib_entity=llc#exercise

    Q
    Cash-Settled Contracts E-Mini S&P 500 Futures Contracts and the E-Mini S&P 500 Options Contracts for the quarterly contract months (Mar, Jun, Sept and Dec) are settled in cash which means that there is no delivery of the individual stocks in the case of the futures contract or in the case of the Option Contract, there is no delivery of the underlying Futures Contract. E-Mini Futures Contracts are settled in cash using a Special Opening Quotation, on the morning of the third Friday of the quarterly contract month. The Special Opening Quotation is based on the opening prices of the underlying component stocks in the S&P 500 Index, or on the last sale price of a stock that does not open for trading on the regularly scheduled day of final settlement. For the serial E-Mini Options Contract months (i.e. Jan, Feb, Apr, etc.), the E-Mini Option settles into the underlying E-Mini S&P 500 Futures Contract.
    UQ
     
    #29     Jan 24, 2011
  10. we all know what the spec's are ( I have lived them) assuming the above position......close of trading FEB exp... IF ES is 1180 THEN

    the call expires
    1289 ES put will convert to a long Mar ES cash and your account will have $5000 removed from it (you collected $2000 for the trade so your only down $3000

    The ES cash you bto at 1286.25 will have bled a bit over $5000 and net net you will be long 2 ES contracts and poorer by $8000

    THEREFORE I assume you won't leave this and go on vacation....
     
    #30     Jan 25, 2011