TonySanDiego trades an option

Discussion in 'Options' started by TonySanDiego, Oct 17, 2002.

  1. Since I don’t normally hang out in the options area, I thought I would post an option trade I am making.

    Bought a put on EXPE just after that 11:30 ramp up.

    BOT (1) put Nov 50 @ $3.50

    Watched EXPE for a while and it seemed to be quite strong today. So... I was getting worried about my put position getting very negative.

    SO......... I bought 50 shares of EXPE at 51.33 as a hedge.

    I am going overnight with 1 EXPE Nov 50 put and 50 shares of EXPE long.

    I think I will make a little money if EXPE shoots off to the moon in the next couple of days. The put should decrease in value at a slightly slower pace than the stock price rises. But it is really only a hedge. Lets me stay with my put through this wiggle.

    I should make money if EXPE falls on hard times in the next couple of days. If I do nothing and EXPE falls, the put will increase in value progressively faster than the half lot of EXPE stock will decrease in value. If EXPE looks to be faltering, I will take off the stock at a small profit and let the put do it's work.

    If EXPE does nothing significant in the next few days, I will have to find a spot and get out before time decay does it's dirty work on the put value.

    That the theory anyhow.

    In summary: 1 EXPE Nov 50 put @ $3.50
    50 EXPE long @ 51.33

    Any thoughts from the options regulars?

    All this high finance is tough on me.. (1) put, 50 shares.. wow.

    But you gotta learn somewhere... :confused:

    Gotta luv IB too.
  2. why didn't you just short an ATM call and buy the stock??

    ....................................or an ITM call.............................??

    just curious. i am a very bad options trader. i gave it up, and started making more money than i lost.
  3. sometimes.

    IB is very coy with their affection, so don't get too attached.
  4. There is no edge in what you did; you gave up the spread and hedged ....

    And; where did you get your delta?
  5. Bung,

    I like IB because I can do these things for cheap.

    Doing things cheap is the best way to learn.


    In case you didn't notice, I don't have much of a clue exactly what I am doing. I have never tried to hedge a position before. This started out as a straight "buy a put". But EXPE looked too frisky, so I hedged it.

    It may well turn out I should have simply sold my put and closed the deal out.

    Anyway, that is why I have such a large position on... :p
  6. TonySD

    I trade equities only, and was wondering how this is working out? Looks like EXPE is up about 1.50, and your put is down less than a dollar.
    Keep us posted (pun intended) :D
  7. I figured that out ...
  8. OK..

    My first foray into options hasn't worked out exactly according to Hoyle, but everyone starts somewhere.

    The first 2 trades that I closed out today could have been even or mayby just a teenie winner IF I had been paying closer attention.

    I have put on a couple of additional positions. One bear spread on BAC, we're fat below 65.00 at expiration.

    I went short OMC at 60.00, and protected it with a Nov call at 60.00. Hope OMC tanks big next week.

    Here are the positions.
  9. Throwing darts ...
  10. I would think he assumed the delta of an ATM option to be .50.

    And; you know what happens when you ASSume.
    #10     Nov 1, 2002