What options play would you put on if...

Discussion in 'Options' started by Cutten, Jan 10, 2008.

  1. Cutten


    ...the S&P puked down to the low 1300s, VIX went to 35, and you thought that stocks have put in the lows for the year?
  2. is this a trick question? ;-)
    long calls
  3. MTE


    Sell puts or put verticals, buy OTM butterflies...basically, you wanna be long delta and short vega.

    Long calls are not a very good play cause they are long vega.
  4. =======================
    Exactly, it may be a bit tricky;
    finding things better uptrending than SPY.

    So when a high probabliity bounce like $130 or 120 on SPY,;may buy something.Main trends still down there.

    With 50 & 200 dma down ,down on SPY,wouldnt be in a hurray to buy that;
    even if its a bit oversold, Cuten.:cool:
  5. The only trade in that scenario is the long risk-reversal; long otm calls, short otm puts.
  6. ==================
    This coming week may well have a relief rally;
    not likely a low for the year at all, since just barely halfway thru January.