Sharing+Discuss Option Trades/Strategies

Sorry I dont own those nor have I ever owned those but I can post the yahoo threads where you show you do.

Why assume I am angry?

 

Did you invest in BOA and Country Wide on someones recomendation?
Is that why you seem so upset and angry over them?
That's why I never recomend my trades to anyone.
One never knows how a shared "real time" trade will turn out weeks or months down the road.
Thus, I simply post them, discuss why I initiated them, and then allow others to monitor, discuss and evaluate them for themselves.

I've had plenty of gains and losses over the years, in plenty of stocks, in plenty of industries..... including housing related.
But there comes a time when you need to put the past behind you and move on.
Isn't it time for you to put your past mistakes behind you as well?
It's very unhealthy to dwell on past mistakes year after year. Learn from them. Don't obsess over them.

Xflat, this is a board for sharing and discussing option trades and strategies.
Do you have a trade or strategy you'd like to share with the board? No recommendations please. Just trades you are considering or have actually initiated.
Others can make up their own minds if they want to consider it for themselves.

Putz Master

 

You have posted several times on this very thread that you claim I am angry. I have answered already that I did not invest in those companies you are stuck in, yet you dont appear to be able to understand that.

I'll ask yet again...

Why assume I am angry?

I did not invest in any of those stocks. I was and am very clear about that. Are you angry because I asked about some of the trades you have posted in the past? Are you now saying that this thread is only for discussing trades you post now but not the rest of your track record?

How will you duck those questions?

 

You have 74 posts. Exactly how many threads you started got moved to journal? How can you already be so pissed off?

 

I currently have an open order pending for BMY.
Last time I checked, it was one penny away from getting filled.
I have an active June $17.50/$15 BMY spread, along with 13 other June spreads expiring shortly.
I'm hoping to replace that June BMY spread with this $17.50/$16 Sept spread.
Credit of $0.34.


The $0.34 credit may not seem like much for a 3 month trade. But given the 1.5 strike gap, it translates into a reasonable R/R of 3.5:1.
Those smaller 1.5 strike gap trades don't offer as much credit as a wider 2.5 gap trade might, but they tend to hold their value better, if/when the stock begins to deteriorate.
Thus enabling one to close down a deteriorating trade with less damage.
While I don't anticipate having to close this potential trade prematurely, I like to prepare for potential difficult times before they arrive.
Thus, given the choice between a smaller strike gap with its smaller credit, or a wider gap with its larger credit, I will usually select the smaller gap and credit.
But that's just a personal preference. I'm not implying one is better than another. We all have different risk management styles and preferences.

Putz Master

 

Even the greenest neophyte to options would realize that the closer the strikes the less difference there is in the premium in the options which make up a spread and the smaller credit you’ll receive on a spread. You tend to repeat that on many many posts. Incidentally they don’t “tend” to hold their value better, they have a lower delta and therefore they do change in value at a lower rate. The rest of the options world measures change in price via “delta.” Again you state the obvious that a deteriorating trade with closer strikes would be easier to close down. No kiddingLOL.. lower delta trades do change in value at a slower rate and are easier to close.

Now to the point we’ve been discussing all day. When you had deteriorating naked puts like you did in Country Wide and many bank and home builder stocks over the last two years why didn’t you take any action at all? On dozens of trades the stock zoomed right through your self-proclaimed safety margin and through the strikes you were short and you took no action. Despite what you said above about how you like to prepare it would appear in those trades not only where you not prepared you took no action at all.

Are you going to address why you post so often you feel I am angry or is that going to disappear like you thought your old track record did?

 

You certainly don't seem upset, angry or defensive.
Nor do you seem obsessed with 2007.
Not at all.

 

Not upset, angry, defensive or obsessed, just want to give a clear picture of your track record and antics. You tend to omit things others find interesting.

 

You are presenting a very clear picture.
Well done!

 

<<< The $0.34 credit may not seem like much for a 3 month trade. But given the 1.5 strike gap, it translates into a reasonable R/R of 3.5:1.
While those smaller 1.5 strike gap trades don't offer as much credit as a wider 2.5 gap, but they do tend to hold their value better, if/when the stock begins to deteriorate.
Thus enabling one to close down a deteriorating trade with less damage.
Thus, given the choice between a smaller strike gap with its smaller credit, or a wider gap with its larger credit, I will usually select the smaller gap and credit. >>>

Continuing with my discussion above, which seemed to upset xflat2186:
Another aspect of my preferred risk management preference, is to select strikes otm..... (preferably at L-T tech support.)
Many like to select strikes atm for its higher credit, and simply manage the risk more conservatively.
But I prefer more otm strikes, because of the potential risk of a stock gaping down a significant % at the open.
Having that otm safety cushion and more narrow strike gaps, with it's more stable credit, gives me "time to react".

My goal is to have "time to react" to a deteriorating stock, and to be holding a more stable credit (lower delta strike gap), BEFORE that deteriorating stock has a chance to go ITM.
By planning for potential problems BEFORE they occur, it puts me in a better position, with more time to mange them, if/when they occur.

My prefered risk management style, may result in a wider R/R ratio than some are comfortable with. But I'm more concerned with having "time to manage the risk" during volatile times, than with how a trades R/R appears on initiation of the trade.

Naturally I prefer a shorter one month contract than a longer 3 month trade. But I will almost always give a stronger priority, to a more otm strike selection, with strong downside tech support, and a more narrow strike gap,... than I will give to a shorter contract.
Faster time decay is nice. But as we learned in 2007 - 2008, stock prices can drop, a lot faster than time can decay.
Thus I prefer to set up my trades,to give me "time to react" to periods of extreme and sudden volatility.

Putz Master