Plain Vanilla Options Trades.

[A Dashing Blade]

Apl 5925 puts quoted 41.5-45.5 at 10.18.46 according to bloomberg?

 

[SOCRATES]

Trade 6...latest

Written 9 Apr 5925 FTSE 100 INDEX puts @ 44.5 Filled, Thank You.

 

[Profitaker]

DB

May be useful to note that the April Call options a similar distance from the money is the 6725, currently 11-15. Could be bought for 14.

 

[Splitlink]

DB

May be useful to note that the April Call options a similar distance from the money is the 6725, currently 11-15. Could be bought for 14.

Ok, I've noted that. Let's see how it goes

Split

 

[SOCRATES]

Socrates,

Since I last posted, another page has gone by and none of us who are following your trades have any clear idea on your progress. Let us be the judges of how good you are, we don't need you tell us. I agree with Barjon about Bulldozer and you have never seen his name on any of my posts. I don't think that I've ever read one of his and the fact that you have entertained him at your home is, to me, completely irrelevant. Most of us, who are interested, are not going to dip into 22 pages of this stuff to get the essentials of five or six trades so, please, list the times of your opening and closing trades, periodically, so that we can study them, otherwise, the whole object of this thread will be lost.

Split

I explained, and I am not obliged to give any justifications or explanations to anybody, but I explained that I know Bulldozer personally and his wife and that they have been my guests on several occasions and I have got to know him well, and I like him. And my conclusion, as the result of many years of experience is that he really knows what he is talking about regardless of whether the great majority are able to keep up and understand or not.

Because he is my friend and because I consider his interests have to be protected I have accepted his invitation over breakfast to act as gatekeeper to his Platinum Lounge, a private members area on his website by invitation only and by individual subscription. As this is exclusively an honorary post, and not vending in any way or form, I have already cleared this with the admin here. My duty there is to keep unsuitable people OUT. In this regard, no one will be allowed membership of such lounge unless they are known to me personally. My say so overrules the moderators there and the owner of the site itself, effective midday today.

You don't have to dip into anything.

On this thread I will systematically prove my point.

My point is consistently the Writer has the edge over the Buyer.

All the Writes are posted live, and are never altered or modified, you will be able to verity from the time stamp adjoining each relevant post.

 

[A Dashing Blade]

Trade occured at 10:57:30

It's 400 points out of the money
FTSE hasn't been down there since 3 October 2006 last year.

Market quote was 43-47.5
Soccy went 44.5 bid and was filled.
Implied Vol 14.9%
Delta -17.5%
Theta 0.677

March future was trading at 6316.5 (remember that this, NOT the index will be what the MM's use)

Index itself was 6325.8, you've got approx 76 points of dividends coming out of the market before expiry, a big chunk of which looks to be coming out early March

Equivilant ootm call is the Apl 6725 calls

Quoted 13.5-16.5 at the time of trade
Assume a trade inside the market as market was falling @ 15 . . .
Implied = 9.72%
Delta 9.8%
Theta 0.3

 

[Profitaker]

The delta of the Apr 5925 puts is about -0.10, meaning if they are priced correctly they will have a 90% chance of expiring worthless. The delta of the 6725 call is similarly +0.10 meaning they too have a 90% chance of expiring worthless.

As an option seller I'd be looking at the position from an expiry point of view. As an option buyer I'd be looking to exit long before expiry and theta kick-in.

A good exit point on the calls would be 28 bid, having doubled your money, and that is where I'd be out. With the assymetric Vol skew in the index having the effect of increasing the option vol as the underlying rises, it would need only a 1% underlying rise withing the next week to achieve that price.

 

[A Dashing Blade]

Confirm the put delta Profit pls . . . tho I admit your number looks more realistic (I'm using bloomie to do it) but have double checked (tho' I'm using bbg on options for the first time)

 

[laptop1]

I I know Bulldozer personally and his wife and that they have been my guests on several occasions and I have got to know him well, and I like him. And my conclusion, as the result of many years of experience is that he really knows what he is talking about ]

I will agree with you Bulldozer knows what he talking about when it comes to option and market in general. shame he's banned. I will not go in to detail, how I know him

 

[Profitaker]

DB

You're using the implied vol at the option strike which is much higher than ATM and significantly higher than OTM calls. This is due the the assymetric vol skew associated with index options. I believe this to be wrong, as there is just as much chance as the 5925 being touched as there is 6725 being touched.

The 0.10 delta statement was an eyeball and not meant to be precise. The point being both options, being the same distance from the money, have the same probability of touching the strike price.

 

[SOCRATES]

I will agree with you Bulldozer knows what he talking about when it comes to option and market in general. shame he's banned. I will not go in to detail, how I know him

Good, I am very pleased to hear it.

I have a memory like an elephant. I have not forgotten you adressed 5 disrepectful and rude and provocative posts to me in a row on other threads. You ought to cogitate and consider it is not wise to engage me as you have done in the past.

By the way this is not a personal attack on you, but I am using it as a model to illustrate a point.

The point I am making, and I am making it to the entirer membership, is that those of you who have been rude, impertinent, disrespectful, confrontational, aggressive, inept, insulting, and generally "naff" to me whether directly or indirectly in the past are now going to be taught one by one what a blunder you have committed by adopting the postures to me that you have.

Enough of Bulldozer and trying to curry favour one way or anouther, now let us have your vote if you please, without further delay.

The topic of this thread is related exclusively as to whether the Writer or the Buyer has the Edge in Naked Option Writing. The vote is either a W or a B, and fence sitting is not allowed. Thank you.

 

[A Dashing Blade]

The topic of this thread is related exclusively as to whether the Writer or the Buyer has the Edge in Naked Option Writing. The vote is either a W or a B, and fence sitting is not allowed.

Neither the writer nor the buyer had the edge in the long run is my opinion and, I suggest, the opinion of the majority of members

 

[Profitaker]

Neither the writer nor the buyer had the edge in the long run is my opinion and, I suggest, the opinion of the majority of members

Absolutely DB !

There is no difference between buying a 0.10 delta option and selling a 0.10 delta option. Yes, selling the 0.10 delta options makes the writer feel safe because it's OTM, and time decay works in the sellers favour. But if you run a monte-carlo simulation thousands of times, you will see that the results will be exactly the same. The educationally challenged here could try this experiment by flipping a coin and recording the results on a spreadsheet. Whether you buy tails or sell heads, in the long run the results will be the same.

 

[Crap Buddist]

Can anyone do a screen print & post the march futures ftse chart please so we can eyeball where these put options have / are being written in relation to the underlying?

 

[ian]

Here you go, Crappie.

A 10 min chart...A nice short opp @ 6310....oops, wrong thread

 

[Crap Buddist]

Cheers, Ian.

 

[SOCRATES]

Neither the writer nor the buyer had the edge in the long run is my opinion and, I suggest, the opinion of the majority of members

You will find it unwise to go along with the majority popular opinion, because it is nearly always wrong and even more unwise of you to suggest the contrary.

The majority popular opinon is wrong with regards to believing that neither the buyer or the writer has the edge in the long run.

Just follow my posts and writes on this thread and I will show you the minority is consistently right and the majority is consistently wrong.

You will be able to logically deduce as well, that as the minority is consistently right and the majority is nearly always wrong, this in large measure is a contributing factor, and is included among other sentiments that serve to enrage the great majority and stimulates them to react the way they habitually do.

 

[SOCRATES]

Har Har...I have just finished a conversation with Bulldozer...we have been talking for 20 minutes and this is why I have not posted it on time.

Some idiot has bought from Bulldozer 1000 Apr 5925 FTSE 100 INDEX Puts, he has just written @ 45....

Probably a hedging op.

These are also going to collapse.

Perhaps you lot over there might like to follow the progress of this trade as well, to see how it pans out .....:cheesy:

 

[SOCRATES]

I have just come off a crew discussion and Bulldozer has come in to persuade me after detailed discussion with regard to the Number Crunch to do another 9..... at a better price, so we shall see.....:cheesy:

 

[SOCRATES]

Very bizzi...
written 9 @49.5
deatais in next post.