Ratio Strategy

Discussion in 'Options' started by asdfghj7, Mar 24, 2009.

  1. My bad my bad. Here it is. My original post was all over the place.
    Heres how it should read.

    Long one 6 month ATM call at 100 for $5pt
    and
    Short one 12 month OTM call at 130 for $5 pt

    Mark showed me this was the equivalent after I gave him the right numbers

    The other scenario would be :
    Long one 3 month ATM call at 100 for $5pt
    and
    Short two 3 month OTM calls at 110 or $2.50 each.

    How do I avoid the naked calls risk other than purchasing a call option above the two 110 calls I sold. There has to be a quick adjustment somewhere for this situation
     
    #11     Mar 25, 2009
  2. Are those figures accurate? The ATM calls seem too cheap. The OTM price appears to be OK. Which stock is this ?





    forex-forex
    ---
    Option Guru
     
    #12     Mar 25, 2009
  3. spindr0

    spindr0

    The short call is either naked or its covered. Covered means owning shares of the underlying or an equal number of long calls. That doesn't necessarily solve your problem of mitigating the risk but it cures nakedness :)
     
    #13     Mar 25, 2009
  4. No. I see it's the 130 call, and I give up.

    Mark
     
    #14     Mar 25, 2009
  5. spindr0

    spindr0

    LOLOL.. Don't sweat it. :)

    The stats in the chain were bad from the start.
    Asd was just practicing his typoese :)


    I'm off to set up for the opening of the Gambling Channel at 9:30 AM. Later.
     
    #15     Mar 25, 2009