Falconview: I hope people out there are doing well and are all safe, and that you are well and safe. With regard to options, I think you are a very intelligent person, and you seem to have a lot of experience from past businesses/etc. The aim of my post was mainly to suggest that you may want to double check the building blocks just to make sure. The building blocks in options are puts and calls. Also you mention some put buying. I do not recall mention put buying at all. In fact I personally do not like being net buyer of premium. Options are difficult to grasp at the beginning, and even for experts. One learns them by following them. Here is something that may resonate with you. If I forecast rain, I bring an umbrella. If I forecast snow, I wear boots, etc. Note that to be correct about the effects of weather, one needs to forecast the weather correctly AND do the right things. For instance, one can forecast snow and if one brings an umbrella, it does not help if the boot was the thing to bring. So one needs to learn the equivalent of umbrellas and boots in options (they are the tools such as spreads, straddles, strangles, etc), and also need to make some forecasting, and know how to apply the right tool to the right forecast. For example: if one forecasts the market at expiration to be between prices A, and B, what would one do? Answer: a number of things are possible, such as selling a straddle at strikes A and B.
Whoooosh! You are way too advanced in understanding options, from my simple country boy outlook! ( grin! ) However, maybe it will come in time? Put a dollar value to it and I'd learn it in a hurry. ( grin! ) Well another Monday. Market being unsettled. I have my three option strategies ready for whatever happens I hope this week. a) Vertical BEAR CALL credit spread b) Short Straddle c) Buying LONG PUTS if the market does something in this line. Spent the weekend reconsidering my statistical analysis of things to try and experiment with. Got two new paper formats to enter data on and see if I can get anything from them? In the meantime was seriously wondering about using real money in a couple of months, if I can get back to break even in the web based paper trading. Current balance is $87,829.25 down from $100,000 Kind of went up and down a bit since starting 5 months ago. Hit a low of $82,000 thereabouts if I remember rightly? Puzzling out how to make this work in real money, if I can get my strategies working all the time, as a I learn them. Was thinking n the idea of $5000 per strategy. Got plenty of weeks yet to think about that. Curious to find out which strategy makes the most money SAFELY.
My stock market models told me about one hour ago, that buyers might show up in the area of NDX 1810 (posted on Shortie's thread). This morning selloff might be a trap for bears. When do your model say Falconview? Sir Galahad out
11:05 a.m. my local time. Must be 1 p.m. NY time. Just came back to the office. Was lying in the hammock enjoying the Easterly trade wind, warm and light coming a 100 miles from the coast and up in the hills here. Nice warm day, light blue sky and tiny clouds. Good sailplaning weather, if I only had a sailplane. Everything green around here in the two valleys I look over from my office verandah. Just had a late breakfast. Take a quick look at BIG CHARTS. Nothing on there, market diddling around. I don't even get excited until it moves 10 pts OEX or two strikes in one direction or the other. So far it is just staying pretty still. We got a six point move up at the open, but since then it drifted back down. *************************** Sort of think of that SHORT STRANGLE a bit once in a while. Plan to wait until Thursday to see about it. I could not figure a way for you to predict where the index will end up on FRIDAY EXPIRATION though, from Thursday? How do you predict that? ***************************
Nice life! Good for you. Weather here is rain, cold, cloudy, and ugly. Market revisiting the bottom. Lift off at the cap? We shall see. I am short puts.
I sold when when at the bottom area. You make a sell to open order. Check it out. Is there old money in Belize? Is there risk money that likes the stock market over there? Maybe I should have a trip to Belize. By the way: where is Stanford (Michael)? I still have to get back to him about his email. He seems to be a nice guy.
This place is a small place. It has crossed my mind to deal with banks and the Social Security board though, should I ever be successful. Would need a track record I would think for a year at least. So if you want to sell a PUT you can? Then buy it back, right or wrong on direction? That opens a whole new dimension in trading to me!
The posts were trying to get you to see things. I have a sense that your eyes are starting to open wide. Yes you are correct about the puts. If market rises, you cover them back at a cheaper price. You should understand that they can gain in value if you are wrong on direction. You can however get a cushion.