Plain Vanilla Options Trades.

[A Dashing Blade]

Is it writing a call & being Long a call ?

Unlimtied loss on the write & unlimted gains on the long call

If the same month then loss limited to differnce in strikes eg Long 100 Call/Short 120 Call
underlying expires at (say 130) then long call is worth 30, short call 10, 30-10=20

Underlying expires @ (Say) 90, then both options expire worthless. You've lost initial outlay.

 

[ian]

When I am answering a previous post, can you please tell us what GFY means??

Thank You.

What does 'CYOF' mean?

 

[CYOF]

Fair enough

Just as we know you're really Bulldozer


Anyway, now we've cleared that up, what's your reply, what do you think is the correct answer to the question you posed earlier . . .

Why do you think that I am Bulldozer?

Is it because I am taking some details from his site - which are there for all to see!

I am not Bulldozer, and will never be as good a trader as Bulldozer, but I will get very close to be as good as him, for he is a good teacher.

Your question:

I will again assist you with learning something of value, but i need to be again careful.

Previously, in the not too distant past, I would have chosen No.1

1. Limited loss with limited gains.

And what is more, I will now show you all the strategies that I had at my disposal for the various market conditions when choosing No.1 - which I will let you figure out yourself.

But, guess what, you will never imagine this, it just so happens that all of the standard stuff, that is known to all, just happens to be flawed.

Where is this flaw - well, if you wan't to find the flaw, then you must start to Think differently.

You all go on and on looking for so called correct information - well, here is your correct information, but in the real world of trading, it is not that correct at all - and as Socrates quite rightly says.........you see :idea:

 

[CYOF]

What does 'CYOF' mean?

I am always happy to answer any question that I am asked, Truthfully.

CYOF stands for:

Control Your Own Finances

 

[ian]

I am always happy to answer any question that I am asked, Truthfully.

CYOF stands for:

Control Your Own Finances

Hmmm.... should'nt that then make it...'COYOF'?

 

[A Dashing Blade]

Why do you think that I am Bulldozer?
Is it because I am taking some details from his site - which are there for all to see!

No, it's because you have taken info from that site that is only available to someone with admin rights.

But, guess what, you will never imagine this, it just so happens that all of the standard stuff, that is known to all, just happens to be flawed.

Actually, I agree! Personally I take Chick Goslin's views on options and Mandelbrots ideas about market structure as a starting point.

 

[SOCRATES]

Latest...Trade 13

Looking to write 1 6225 FTSE 100 May Put at 150 or better..

 

[SOCRATES]

Just filled at 164.

(1 X 164 X !0) = £1640= Thank You.

 

[CYOF]

Hmmm.... should'nt that then make it...'COYOF'?

Hmmmm, a smart Ian, or should I say a smart Naiiiiiiiiiiiiiiiiiiiiiiii

I will not answer any of your posts again, and for you been so rude and ignorant, I will now not answer any more posts on this thread.

I will now let Socrates thread be, BUT, I will return if Profitaker tells us all what GFY means, and when Barjon tells us all why he did not ban Profitaker, if GFY was indeed a rude and vulgar word.

The big question here, at the moment, is not about Options, but why there appears to be fair treatment for certain T2W members, and unfair treatment for other T2W members :idea:

It really is, Just Not On :idea:

 

[FXSCALPER2]

Hmmmm, a smart Ian, or should I say a smart Naiiiiiiiiiiiiiiiiiiiiiiii

I will not answer any of your posts again, and for you been so rude and ignorant, I will now not answer any more posts on this thread.

I will now let Socrates thread be, BUT, I will return if Profitaker tells us all what GFY means, and when Barjon tells us all why he did not ban Profitaker, if GFY was indeed a rude and vulgar word.

The big question here, at the moment, is not about Options, but why there appears to be fair treatment for certain T2W members, and unfair treatment for other T2W members :idea:

It really is, Just Not On :idea:

Move on, buddy. Get a life and realise that you are producing too much wind and making way too much noise. God knows what your problem is.

 

[zupcon]

The big question here, at the moment, is not about Options, but why there appears to be fair treatment for certain T2W members, and unfair treatment for other T2W members :idea:

It really is, Just Not On :idea:

My advice is that you should stop thinking in terms of fair, and not fair. Its neither useful, nor healthy. You need to consider why you are being treated the way you are, and then control what you can control, rather than the things you cant

regards
zu

 

[atters88]

This is a lengthy thread, so I will try and be to the point:

First, I'll deal with Socrates' question. Yes, on one level the seller of a wasting asset has an inherent edge over the buyer. Also, the fact that the seller doesn't need a distinct move in his favour to have a prospect of winning gives an edge. Finally, the weaker hands presumably tend to be buyers (though what this equates to is debatable).

But none of this means that the seller will actually have an edge in any particular trade because any inherent edge will be eroded or lost altogether if the premium is too low compared to the risk. Also, I'm sorry Socrates but you have to factor in margin rerquirements. Compared with buying, writing an option carries a "loss of opportunity" cost.

Most of my trading involves options simply because that is what has been working for me. And most of the time I sell options for the simple reason that it is easier to anticipate what a market won't do than anticipate what it will do. But there are times when I look at the charts and conclude that the market is mispricing the level of risk and I buy puts (for example, during much of Nov and Dec 2006, puts on the main indices seemed too cheap to me).

Socrates, your willingness to post trades is admirable but posting trades is futile given your stated aim. As has been pointed out by others, a trader skilled in anticipating market direction could equally post a series of winning trades involving the buying of puts. But where would that take us? Nowhere. So please, give your thread some substance and tell us:

How much margin is incurred
Why in each case writing a put was preferable to buying a call.

Otherwise, this thread will remain full of sound and fury but signify nothing.

 

[grantx]

CYOF,

“Dialogue means conversation between two or more people.” And this would include the protagonist. All we’ve had so far are trades entered, ie statements, but not the underlying reasons which just may lead to dialogue.

We maintain beliefs or what we consider truths until we are told otherwise. Therefore, we may end up knowing little of any value, which is worse than knowing nothing, from which wild speculation emerges.

Grant.

 

[SOCRATES]

This is a lengthy thread, so I will try and be to the point:

First, I'll deal with Socrates' question. Yes, on one level the seller of a wasting asset has an inherent edge over the buyer. Also, the fact that the seller doesn't need a distinct move in his favour to have a prospect of winning gives an edge. Finally, the weaker hands presumably tend to be buyers (though what this equates to is debatable).

But none of this means that the seller will actually have an edge in any particular trade because any inherent edge will be eroded or lost altogether if the premium is too low compared to the risk. Also, I'm sorry Socrates but you have to factor in margin rerquirements. Compared with buying, writing an option carries a "loss of opportunity" cost.

Most of my trading involves options simply because that is what has been working for me. And most of the time I sell options for the simple reason that it is easier to anticipate what a market won't do than anticipate what it will do. But there are times when I look at the charts and conclude that the market is mispricing the level of risk and I buy puts (for example, during much of Nov and Dec 2006, puts on the main indices seemed too cheap to me).

Socrates, your willingness to post trades is admirable but posting trades is futile given your stated aim. As has been pointed out by others, a trader skilled in anticipating market direction could equally post a series of winning trades involving the buying of puts. But where would that take us? Nowhere. So please, give your thread some substance and tell us:

How much margin is incurred
Why in each case writing a put was preferable to buying a call.

Otherwise, this thread will remain full of sound and fury but signify nothing.

How many times do I have to keep repeating that this thread is not about buying puts or calls ? How many times do I have to keep repeating this thread is not about the buying side of options, but about the writing side of options, and that the object is to conclusively show the Writer has the Edge over the buyer ?

I am not interested in buying puts or calls at all. I am not.

When you walk into a casino, before you buy your chips to play on roulette, or blackack or chemin de fer, do you ask the cashier if the casiino has sufficient funds to pay out in the event you win a lot as a result of several hours of gambling ? No, you don't...unless of course you are a mad gambler willing to stake £5,000,000 on the turn of the wheel, that is different.

So I cannot understand these obsessions you people have with asking the same silly questions all the time.

The object of this thread is as described at the header, at the very beginning.

If later on I decide to do a thread on exotics you may ask questions about that.

If I later on decide to do a thread on Futures you may ask questions about that.

If I later on decide to do a thread on Shares you may ask questions about that.

If I later on decide to do a thread about writing calls you may ask questions about that.

But please do not persist in asking silly questions for the sake of asking, and please keep this thread on topic, and please, May I have your vote, as to whether the Writer has the edge over the Buyer Please ?

May I ask you to follow the thread as it progresses without any further silly interruptons please ? Everything you need to know has already been explained at a very early stage in the development of this thread. Thank you.

 

[Crap Buddist]

Grasshopper "Tell me master how do I know that criminal A has the edge over criminal B"

Master "You see Grasshopper criminal B over there running with his swag hidden?

Grasshopper "Yes master ,criminal B running, swag hidden"

Master " Now Grasshopper, do you see criminal A running over there with his swag hidden ?"

Grasshopper "No Master, I dont see "

Master "Neither Do I "

 

[ian]

Socrates;

Why dont you hold the positions untill expiry so that we can see if your argument holds up and so proves conclusively that the wiriter has the edge ? cos all you seem to be doing is nipping in and out of the trades.

 

[SOCRATES]

Socrates;

Why dont you hold the positions untill expiry so that we can see if your argument holds up and so proves conclusively that the wiriter has the edge ? cos all you seem to be doing is nipping in and out of the trades.

No I am not nipping in and out.

What happens is that windows of opportunity appear that have to be taken advantage of because not to do so is pointless as they are there for the taking.

But if you follow the thread I am writing at a faster rate at present than I am closing out.

You will see how it is that all the strikes I have written will expire worthless anyway, or at least 85% of them.

 

[Crap Buddist]

"and that the object is to conclusively show the Writer has the Edge over the buyer ?"

We know what the writers written, but what's the buyer bought?

It's like to know light, we must see the dark . A comparison to measure one against the other, I think thats what a lot of viewers just want to see. I can see their points. I mean it wouldnt be a mis matching concept to compare a writers return against a buyers return,especially when demostration of edge writers V buyers is the threads purpose?

 

[options]

Vote: Writing of course. As long as the person knows what he is doing.

 

[SOCRATES]

Vote: Writing of course. As long as the person knows what he is doing.

Exactly, precisely.