In case anyone was wondering what the current BD rates are: Effective Date: 06/11/02 Broker Dealer Rate 2.5000 2.5000 0.0000 Cross-Margin Broker Dealer 2.5000 2.5000 0.0000 Short Stock Rate 1.6000 1.6000 0.0000 Equity Credit Rate 1.2500 1.2500 0.0000 Repo Rate 1.1500 1.1500 0.0000 T-Bill Rate 1.0000 1.0000 0.0000
You are the first person I've spoken to who really understands what I'm doing with these spreads. I understand your analysis completely, and of course, I agree with your conclusions. I am a registered investment adviser, and I started doing these put spreads in June 2000, when we all knew the market was overvalued and was due for a downside correction. I achieved a 52% return on investment in 2001 and am up over 30% so far this year. It's nice to meet someone like you who understands what I'm doing, and I'd like to make you a deal. I am always looking for new clients and with most people losing money in this market, people are looking for ways to make a profit to help them recoup some or all of their losses. If you get clients for me, I will split my management fee with you. The only reason I am offering this to you is because since you understand what I am doing, you can explain it clearly to potential investors, and that will benefit all of us; the investor, you and me. If you're interested in discussing this further, mail me at ron.b@comcast.net. Again, thank you for your insightful analysis. Ron Bane
Gentlemen, I just want to share with you my option trading ideas. I simply use Technical analysis, and look for stocks that historically make large moves over a small time frame, have low implied volatility, and technically seem to be in a position to make a large move. I then Buy a straddle/strangle, as close to delta neutral as possible. By definition after the first dollar move one wil be gaining more than the other will be losing. The other tactics I like are using technical analysis identifying piviot points in the stock. then if I am bearish creating a call spread with 4:1 ratio risk reward, or if bullish a put spread same ratio. I usually sell the in the money option to get more credit. Feedback?
I do similar type trading. Give us an example of an open spread that you have now so we can discuss it.
Actually right now I am waiting to see if we bounce break the 9/11 lows. we seem to be lacking momentum and I dont like Theta. When we hit the lows I will probably Enter some new positions. My last strangle of KLAC the day before the Intel announcement and I also had a strangle on AMGN. The next morning I took both off for a profit of 2050.00 Before comissions. That was the last trade i have done. By the way have any on you done Delta Neutral trading using the stock and a option contract total to equal a deltral neutral position. Then adjust when the delta gets out of line therby making a "riskless"scalp. I have read that this is how market makers trade.
First, I just want to say that I'm not an options trader, so if I sound like an ignoramus, that's because I am. This is a strategy I heard worked well and wanted to get an opinion from one of you pros. Here goes: ABC stock $100 a share; Date Jan 1 Sell the Jan 105 call for 3.50 Sell the Jan 95 put for 3.00 Close out position if stock goes to 111.50 or 88.50 Sounds like a reasonable strategy to me?
Let me restate, when we hit the support of sept 11. then I am looking for volume to comfirm the breakout or breakdown.
Company reports earnings and warns going forward and drops 20 points. If you wrote 10 contracts, you lose $13,500! As the person above me said, back to the drawing board!
Lol...no wait a minute. If the stock goes to 111.50, then the 105 call will have a value of 6.50 at expiration...right? If the stock goes to 88.50, then the 95 put will have a value of 6.50...right? lol When I say sell, I mean I'm going "NAKED" for this bad boy...lol