Plain Vanilla Options Trades.

[SOCRATES]

That's odd, chap there said he had to ban a stunted Irishman, a philosopher type, and a madman only last week due to their incessant waving of the FT, quite upset the regular clientèle he claims.

Have you ever read "Confusion de Confusiones" by Joseph de La Vega written in Amsterdam in 1688 ?

This work was a discussion taking place between a philosopher, a broker and a trader,... same thing...history repeats itself....hence the mystery of the "Ducatons" mentioned there, that serves to baffle nearly every reader.

You know I have accepted the challenge to do 100 correct in a row ?
This is a contest between Bully and myself and I have accepted.
The loser agrees to donate £5000 to charity.
It starts on, (we expect) March 19th.

 

[Splitlink]

2 quotes about writing naked Puts from Bulldozer: -

If ur naked SHORT puts become deep ITM? the margin will be heavily increased and if marg payments are not paid i think most brokers will not allow u to roll position over to a longer month and may risk having all positions closed at massive loss.

Dont forget, the broker needs to protect his company too and must apply the rules. In the event of a mrkt crash there will be hundreds of Option traders faced with this MARGIN problem. If he allows all the traders to roll over positions and the mrkts FALL deeper still, ur margin will be massively increased and ur problem made even greater and this will send the broker and you down [bankrupt] and possibly all the profits made in the past will NOT be enough to settle the losses. "

"I was mainly refering to index Put selling.
Are you saying there is NO risk in selling puts indices Do you have any idea what kind of margin will be charged if position goes 100-300 pts ITM? Also, how much time do U think ur broker gives u to meet the margin payments? and what happens to ur positions if margin payments are not paid?

If ur positions were on Margin call? would ur broker allow U to roll positions without first settling the margin call? He would be mad to let u do so. If my broker was to allow traders to roll positions without first settling the margins calls, do u know what I'll do? I'll get the hell out of that company and find one that does NOT allow that facility.

There are many strategies that says limited gain with unlimited loss potential. What is generally meant is that ur account could get wipe'd out and still be left owing the brokers a LOT of money."

Glenn

£


I believe Socrates just said that his profits were £5000. To answer your first paragraph and with due respect to his skill in making that much money over the period, I don't think that that is, even, a small percentage of what would be required to meet a margin call. At the beginning of the thread we were talking in the region of about £50000 margin required and this would have to progressively increased as the market moved against him.

I've been away so I'm not sure what you have all been talking about, but I don't think that Socrates strategy is to hold these trades for too long. More of a guerilla tactic, in and out. over short periods. He just said that he had decided to let the options he held expire worthless to prove to his critics that they were wrong. Bad tactic, Socrates! You are letting them influence your better judgement! Unhappy man!

I would imagine that an online broker, such as IB, does not allow any credit. The margin money would have to be in the account beforehand, so as to be available when required, or the trade would be closed.

Split

 

[SOCRATES]

2 quotes about writing naked Puts from Bulldozer: -

If ur naked SHORT puts become deep ITM? the margin will be heavily increased and if marg payments are not paid i think most brokers will not allow u to roll position over to a longer month and may risk having all positions closed at massive loss.

Dont forget, the broker needs to protect his company too and must apply the rules. In the event of a mrkt crash there will be hundreds of Option traders faced with this MARGIN problem. If he allows all the traders to roll over positions and the mrkts FALL deeper still, ur margin will be massively increased and ur problem made even greater and this will send the broker and you down [bankrupt] and possibly all the profits made in the past will NOT be enough to settle the losses. "

"I was mainly refering to index Put selling.
Are you saying there is NO risk in selling puts indices Do you have any idea what kind of margin will be charged if position goes 100-300 pts ITM? Also, how much time do U think ur broker gives u to meet the margin payments? and what happens to ur positions if margin payments are not paid?

If ur positions were on Margin call? would ur broker allow U to roll positions without first settling the margin call? He would be mad to let u do so. If my broker was to allow traders to roll positions without first settling the margins calls, do u know what I'll do? I'll get the hell out of that company and find one that does NOT allow that facility.

There are many strategies that says limited gain with unlimited loss potential. What is generally meant is that ur account could get wipe'd out and still be left owing the brokers a LOT of money."

Glenn

I have just spoken to Bulldozer about your comments.

Both he and I agree you are absolutely right.

That is why children should not be allowed to play with matches and monkeys should not play around with bombs with a fuse that is lit, because the consequences could be fatal.

Good post.

 

[SOCRATES]

£


I believe Socrates just said that his profits were £5000. To answer your first paragraph and with due respect to his skill in making that much money over the period, I don't think that that is, even, a small percentage of what would be required to meet a margin call. At the beginning of the thread we were talking in the region of about £50000 margin required and this would have to progressively increased as the market moved against him.

I've been away so I'm not sure what you have all been talking about, but I don't think that Socrates strategy is to hold these trades for too long. More of a guerilla tactic, in and out. over short periods. He just said that he had decided to let the options he held expire worthless to prove to his critics that they were wrong. Bad tactic, Socrates! You are letting them influence your better judgement! Unhappy man!

I would imagine that an online broker, such as IB, does not allow any credit. The margin money would have to be in the account beforehand, so as to be available when required, or the trade would be closed.

Split

You are right as well but it is not a matter of letting anyone influence my judgement. My judgement remains unimpaired, it is just that I can, u c ? So why not ? And that is why I am able to do what I do.

 

[Splitlink]

You are right as well but it is not a matter of letting anyone influence my judgement. My judgement remains unimpaired, it is just that I can, u c ? So why not ? And that is why I am able to do what I do.

How did I know that I would get an immediate answer to my post?

 

[Glenn]

I have just spoken to Bulldozer about your comments.

Both he and I agree you are absolutely right.

That is why children should not be allowed to play with matches and monkeys should not play around with bombs with a fuse that is lit, because the consequences could be fatal.

Good post.

"Once again, the remarkable similarity between all of the market crashes is striking. It seems that after all of the historical market crashes, people would learn to foresee a coming financial disaster. This rarely happens, of course."

And in addition you imply that professionals know when the dirty bomb will go off in the city, and when the next earthquake will hit San Francisco and all the other instantaneous events which can cause a market crash.

Surreal.

On Black Monday in 1987 you couldn't even get through to your broker, and even if you had, it didn't guarantee that you would find a willing counterparty.

What a professional does know is that 20 short naked option trades is a trivial and meaningless exercise no matter what the outcome.
No disrespect, but anyone who is impressed by it clearly hasn't the faintest understanding of short naked options.

Glenn

 

[SOCRATES]

"Once again, the remarkable similarity between all of the market crashes is striking. It seems that after all of the historical market crashes, people would learn to foresee a coming financial disaster. This rarely happens, of course."

And in addition you imply that professionals know when the dirty bomb will go off in the city, and when the next earthquake will hit San Francisco and all the other instantaneous events which can cause a market crash.

Surreal.

On Black Monday in 1987 you couldn't even get through to your broker, and even if you had, it didn't guarantee that you would find a willing counterparty.

What a professional does know is that 20 short naked option trades is a trivial and meaningless exercise no matter what the outcome.
No disrespect, but anyone who is impressed by it clearly hasn't the faintest understanding of short naked options.

Glenn

You are absolutely right again, but not for the reason you think you are ..:cheesy:

Another good post yet again.

 

[SOCRATES]

May I ?

The important bit you have missed is inserted in red.

"Once again, the remarkable similarity between all of the market crashes is striking. It seems that after all of the historical market crashes, you would expect people would learn to foresee a coming financial disaster. This rarely happens, of course."

 

[Bez]

I'm not sue that pesky black swan will come back from his migration early.

In 2008 the seasons begin to change, that might encourage him to return

 

[SOCRATES]

I'm not sue that pesky black swan will come back from his migration early.

In 2008 the seasons begin to change, that might encourage him to return

.

 

[Splitlink]

May I ?

The important bit you have missed is inserted in red.

They are, of course, different people. Hard to believe, but eighteen years have passed since then. Have you not wondered why I see Blacks Swans around corners? I have seen them in action and, I'm glad to say, am a survivor enjoying, if not filthy riches, at least, reasonable prosperity.

Split

 

[dc2000]

And in addition you imply that professionals know when the dirty bomb will go off in the city, and when the next earthquake will hit San Francisco and all the other instantaneous events which can cause a market crash.

" I can sell Nikkei short options to pay margin on futures contracts" - Nick Leeson - prior to Kobe earthquake

 

[SOCRATES]

" I can sell Nikkei short options to pay margin on futures contracts" - Nick Leeson - prior to Kobe earthquake

Not correct.

Nick Leeson was long on Nikkei Futures and had already accumulated losses, and when the Kobe disaster struck the market went up for three days, and he thought it was the bottom, and bought more...and then the market plummetted and that was the end.

 

[dc2000]

Not correct.

Nick Leeson was long on Nikkei Futures and had already accumulated losses, and when the Kobe disaster struck the market went up for three days, and he thought it was the bottom, and bought more...and then the market plummetted and that was the end.

Soc my post was with ref to glenns post and I beg to differ but it is you who are wrong I say this having researched the Barings collapse in some detail.
Nick did use options to fund margin on futures contracts

 

[ducati998]

Soc my post was with ref to glenns post and I beg to differ but it is you who are wrong I say this having researched the Barings collapse in some detail.
Nick did use options to fund margin on futures contracts

Correct, selling premium to fund the margin...............could hardly ask for more funds when ostensibly he was profitable could he?

jog on
d998

 

[dc2000]

thanks Ducati
Soc I presume you are thinking of how to word an apology just a sorry will do

 

[counter_violent]

thanks Ducati
Soc I presume you are thinking of how to word an apology just a sorry will do

get real D C

 

[SOCRATES]

Soc my post was with ref to glenns post and I beg to differ but it is you who are wrong I say this having researched the Barings collapse in some detail.
Nick did use options to fund margin on futures contracts

But he was long on the Nikkei future.

I have it in my archives...all the Sunday Times articles one by one.

How he funded the margin is immaterial.

The significant part is ( not unlike others......btw... .) he persisted in cotradicting the market, u c ?....Forcing...

Now, in a way I feel sorry for him, because he had no one to guide him and give him a friendly nudge........ unlike you.......so you must not be harsh and you must not be unfair.

I feel sorry for the kid I really do.

He was put into the lion's den without any training or knowledge of any sort.

 

[dc2000]

But he was long on the Nikkei future.

I have it in my archives...all the Sunday Times articles one by one.

How he funded the margin is immaterial.

The significant part is ( not unlike others......btw... .) he persisted in cotradicting the market, u c ?....Forcing...

Now, in a way I feel sorry for him, because he had no one to guide him and give him a friendly nudge........ unlike you.......so you must not be harsh and you must not be unfair.

I feel sorry for the kid I really do.

He was put into the lion's den without any training or knowledge of any sort.

my post was about how he funded margin not what his position in futures was, I guess your changing the subject is as close as I am going to get to sorry dc
I wouldn't put too much belief in the Sunday papers

 

[SOCRATES]

my post was about how he funded margin not what his position in futures was, I guess your changing the subject is as close as I am going to get to sorry dc
I wouldn't put too much belief in the Sunday papers

Are you implying that the Sunday Times Business News section would have told deliberate lies about the affair, considering the Bank Of England, which is The Lender of Last Resort was actively engaged in discussions with the Sultan of Brunei in the middle of the drama to try to put together a rescue package for the bank (which subsquently did not materialise) but the matter was fraught at the time as I remember ? Is that the way you think ?...that a newpaper would stick its neck out and leave itself open to litigation in this way ?

The bank collapsed because the exposure in the futures market was huge and negative and beyond the permitted margin allowed by the banking system, the skirt. The fact that in the latter stages extra funding may have been created by what you say is incidental.

My point is that the bank was brought down in the manner reported at the time, no more, no less.

You are trying to force fit the concept of writing options and Black Swans together which is like taking bits of a jigsaw puzzle that do not slot in together and forcing them to fit to suit your ideas, which are not correct, once again.

I am getting really fed up with your nonsense, if it is not one thing, then you invent another.