Plain Vanilla Options Trades.

[SOCRATES]

The post above, post number 158 refers to trade B

The March FTSE 5957 puts is currently 37 to buy. ( trade C)

These are independenly showing a profit of £1000 since yesterday..

My view is that they are also a hold as the portents...he he..."the portents" are still bullish.

Both the above post and this one constitute my personal view and are not in any way a recommentation or a market tip ~ they are simply posted to illustrate my point, being,....

The Writers have the edge over the Buyers.

 

[A Dashing Blade]

4. Socrates and myself proved the the BUYERS LOST - forget the % gains.
TRUE or FALSE?

CYOF/Bulldozer/Stuchio

Clearly the put writer won & the put buyer lost, I wasn't aware that, in a falling market assuming ceteris parabus on the greeks, that this need proving.

Please point out where the call buyer lost.

 

[CYOF]

CYOF/Bulldozer/Stuchio

Clearly the put writer won & the put buyer lost, I wasn't aware that, in a falling market assuming ceteris parabus on the greeks, that this need proving.

Please point out where the call buyer lost.

If you insist my good friend, but it may cost you a donation to charity, if you agree.

What do you say then?

 

[SOCRATES]

CYOF/Bulldozer/Stuchio

Clearly the put writer won & the put buyer lost, I wasn't aware that, in a falling market assuming ceteris parabus on the greeks, that this need proving.

Please point out where the call buyer lost.

In a falling market (as you say - not me) disregarding nationalities or language...:cheesy: ...it would be patently obvious the call buyer would not win...( I am only joking)..

However, may I remind you we are not interested in what the call buyer or the put buyer does...nor are we interested in discussing margin...we are interested, and the focus of our interest is exclusively we are able to prove conclusivelly that the Writer has the Edge, and that is why this thread is exclusively devoted to Plain Vanilla Index Option Writing and nothing else, because it is the best and clearest method of illustrating the point I wish to make, which is :~

The Writer has the edge over the Buyer.

 

[zupcon]

I would have THOUGHT that ALL CAPITAL letters would be easier to READ for some members - especially those with VISION problems?

Yes well we all know what thought did ....

There you go again, ignoring the wider context. Capitals may indeed be easier to read for those with vision difficulties, but theyre more difficult to read for those that dont have vision problems

The shapes of letters play an important role in the ability to read easily and quickly. Research findings vary but they quite clearly show that the use of capitals reduces the speed at which text can be read by 14 to 19 percent. Reading speed is optimal when uppercase and lowercase letters are used.

When extra emphasis is needed, bold has been found to be a better solution than uppercase. It is argued that we tend to recognize words by their overall shape, so the blocky forms created by capital letters are hard to make out.

You dont need to consider users with vision problems, the usability options provided with most operating systems make some provision for those with vision difficulties, such as larger font size, contrast options etc.

Regardless of the technical implications, the owners of the site have requested that members dont use capitals, and as a guest , you should respect their wishes.

Now that Ive taken the time to enhance your knowledge, please show Socrates a modicum of respect and stop trying to derail his thread with your constant silliness. The moderators have kindly provided you with a playground where you and your leprechaun can talk nonsense to your hearts content without polluting and derailing serious debate.

regards and apologies to Socrates for the intrusion.

zupcon

 

[CYOF]

If you insist my good friend, but it may cost you a donation to charity, if you agree.

What do you say then?

Ok Dblade,

Current point gain for Calls since yesterday - Market up ~80 Points:

Feb Calls

6525 - 7 points
6575 - 3 points
6625 - 1 point
6675 - 1 point
6825 - 1 point
6875 - 1 point


Mar Calls

6825- no value
6675 -no value
6925 -no value
6975 - no value

Do you want't me to continue

Do you now see who has THE EDGE in the MARKET ON A DAILY BASIS :idea:

I can teach you some more if you like, but it will cost you a donation to charity.

I have put up my e-mail address on the bottom of my slogan for you - just in case you might be beginning to see THE TRUTH.

 

[A Dashing Blade]

CYOF/Bulldozer/Stuchio

Clearly the put writer won & the put buyer lost, I wasn't aware that, in a falling market assuming ceteris parabus on the greeks, that this need proving.

Please point out where the call buyer lost.

Doh, clearly meant rising market.

 

[SOCRATES]

Yes well we all know what thought did ....

There you go again, ignoring the wider context. Capitals may indeed be easier to read for those with vision difficulties, but theyre more difficult to read for those that dont have vision problems

The shapes of letters play an important role in the ability to read easily and quickly. Research findings vary but they quite clearly show that the use of capitals reduces the speed at which text can be read by 14 to 19 percent. Reading speed is optimal when uppercase and lowercase letters are used.

When extra emphasis is needed, bold has been found to be a better solution than uppercase. It is argued that we tend to recognize words by their overall shape, so the blocky forms created by capital letters are hard to make out.

You dont need to consider users with vision problems, the usability options provided with most operating systems make some provision for those with vision difficulties, such as larger font size, contrast options etc.

Regardless of the technical implications, the owners of the site have requested that members dont use capitals, and as a guest , you should respect their wishes.

Now that Ive taken the time to enhance your knowledge, please show Socrates a modicum of respect and stop trying to derail his thread with your constant silliness. The moderators have kindly provided you with a playground where you and your leprechaun can talk nonsense to your hearts content without polluting and derailing serious debate.

regards and apologies to Socrates for the intrusion.

zupcon

Seriously, as a fleeting aside, this topic of visual faculty is crucially important but frequently overlooked.

There are roughly three categories of individuals, those who are visual, those who are audial and those who are kinesthetic and each group has a propensity to interpret either visually by what they see, or audially by what they hear or kinesthetically by what they feel or are made to feel.

Therefore there are lots of people who face tremendous difficulties when interpreting data, specially if they are unaware of which is their striongest faculty as all human beings have a blend of all three but invairaibly one is more developed than the other two.

Just think of how these problems can be further exacerbated when you add complications involving numeracy (involving for example mental arithmetic) and literacy (writing and understanding the written word) and now you can begin to get a grip on the huge problems many people face with the concept of understanding, whilst being unaware of the limitations imposed by nature, environment, upbringing and education.

 

[Profitaker]

May we enquire as to the margin this position is tying up?

Dear old Soc wouldn't have a scooby doo ! Why ? Because it's not his trade LOL

 

[CYOF]

Jon,

I now have a request of you.

Please remove my GREEN DOTS - for I have no use for such trivial things.

I prefer to concentrate on learning what is required to learn for consistent profits in the Options market.

I do not have any interest in silly things or silly reports.

I am interested in FACTS - nothing else.

Thank You.

 

[zupcon]

Well, it appears that YOU can not read at ALL.... yada yada yada

I was merely illustrating your tendency jump to incorrect conclusions, on the basis of not being in possession of the full facts, and the impact that has on ones ability to think correctly.

regards
zu

 

[CYOF]

Doh, clearly meant rising market.

Read my post again - the market is up over 80 points - is this not a rising market????

On the Feb6575 Calls you profit would be butons - and when you take comissions into account you are on a hiding to nothing.

But wait - maybe 80 points rise is nothing.

Maybe, just maybe, the FTSE will do 800 points tomorrow.

Silly me, I never thought if that. I really am a FOOL :cheesy:

Now, maybe I would be better off BUYING CALLS insted of SELLING PUTS - like Yeh

 

[A Dashing Blade]

Current point gain for Calls since yesterday - Market up ~80 Points:

Feb Calls

6525 - 7 points
6575 - 3 points
6625 - 1 point
6675 - 1 point
6825 - 1 point
6875 - 1 point

So, you admit that call buyers would have made money.

Thank you CYOF/Bulldozer/Strucio!

PS, you may want to quote the FTSE's futures price going forward as, although the underlying of the FTSE options is the value of the FTSE Index, MM's use the future to hedge themselves

 

[A Dashing Blade]

Read my post again - the market is up over 80 points - is this not a rising market????

Obviously my post that you quoted was correcting an earlier post of mine (the one that I quoted in my post) not one of yours (as that would take too long!)

 

[zupcon]

Seriously, as a fleeting aside, this topic of visual faculty is crucially important but frequently overlooked.

There are roughly three categories of individuals, those who are visual, those who are audial and those who are kinesthetic and each group has a propensity to interpret either visually by what they see, or audially by what they hear or kinesthetically by what they feel or are made to feel.

Hi Socrates

Have you also noticed how people will often reveal the category in which they fall through the language they use. Simple examples being, I hear what your saying, or I can see your point of view. Also notice how quickly people with sales training pick up on this and modify the sales pitch accordingly.

Anyway, lets get back to options

 

[SOCRATES]

Hi Socrates

Have you also noticed how people will often reveal the category in which they fall through the language they use. Simple examples being, I hear what your saying, or I can see your point of view. Also notice how quickly people with sales training pick up on this and modify the sales pitch accordingly.

Anyway, lets get back to options

Try this as an excercise when dealing with a persistent salesman...

Persist in replying in terms of : I think, I reason, I percieve, etc., and watch the effect.

This is because many sales training ideas are centred around these patently obvious human faculties which are easily detectable to the trained ear... ...and if they do not appear in coversation the listener is lost...as his primary source of reference in categorising his prospect ...is missing...

Interestingly enough as trading requires the application of impartiality even in discussion as for example on these boards, when facts are laid out in impartial language devoid of clues...hehe...they are misinterpreted, sometimes with comical and sometimes with tragic consequences..:cheesy:

 

[Profitaker]

Silly me, I never thought if that. I really am a FOOL :cheesy:

Now, maybe I would be better off BUYING CALLS insted of SELLING PUTS - like Yeh

Yep, well at least you got one statement right today.

The Apr07 5925 Puts had a delta of -0.24 yesterday. A similar Call option having a similar delta was the Apr07 6475. They closed last night at 46. They're presently 68 bid, so a profit of 22 points would have been made, against Bulldozer's 16 points on the short Puts.

Since you're so keen on facts, you can check them out here;
http://www.liffe.com/data/osp070123f.txt

 

[CYOF]

So, you admit that call buyers would have made money.

Thank you CYOF/Bulldozer/Strucio!

PS, you may want to quote the FTSE's futures price going forward as, although the underlying of the FTSE options is the value of the FTSE Index, MM's use the future to hedge themselves

I will post it again for you my good friend - and if you want to persist in trading for buttons, which I am sure you are happy doing, the that is of course your choice.

This is about THE EDGE -who will make the most money consistently.

Do we need to do this 100 times for ye, or is it as I expect - we could do it 1000 times and it would still make no difference.

*****************************************************************************

Read my post again - the market is up over 80 points - is this not a rising market????

On the Feb6575 Calls you profit would be butons - and when you take comissions into account you are on a hiding to nothing.

But wait - maybe 80 points rise is nothing.

Maybe, just maybe, the FTSE will do 800 points tomorrow.

Silly me, I never thought if that. I really am a FOOL

Now, maybe I would be better off BUYING CALLS insted of SELLING PUTS - like Yeh
__________________

 

[Jack o'Clubs]

On the Feb6575 Calls you profit would be butons - and when you take comissions into account you are on a hiding to nothing.

...

Now, maybe I would be better off BUYING CALLS insted of SELLING PUTS - like Yeh

You can't compare the performance of puts which were 100 points north of the cash index when you sold them to the performance of calls that were 350 points out-of-the-money surely? You should be comparing with the 6325 calls, no? In which case performance of the calls is not 'buttons'.

 

[A Dashing Blade]

Anyway, lets get back to options

So, pending more trades from Socrates, we're still waiting for the rationale as to why writing medium dated ootm puts is better than the equivilant ootm calls if you think the market is going up.

1) Write the puts = limited gain 0f 130ish, potential loss of whatever the strike was (6000ish?) . . . clearly the market will never fall to zero, but doing this exercise on an equity does give rise to this risk, I'm sure Socrates remembers Polly Peck. To the writers advantage is that it's a wasting asset.

2) Buy calls = limited loss, unlimited upside (realistic max move of 25% over the lifetime of the option?).To the buyers disadvantage is that it's a wasting asset.

Note that the June puts written to illustrate this argument were June's, ie 4 months out and, as a rule of thumb, time decay really starts to kick in with < 3 months left.