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Options-trader
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Posts posted by Options-trader
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Today i have closed 40 contracts of AUGUST'12 95 CALL (7.80$) and have bought 40 contracts of SEPTEMBER'12 105 CALL ($2.60). Total investment to the combination was reduced to $27.600.
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I propose you to observe the process of my next option combination conducting.Size of investment - 50,000$. For purchase straddle i put no more than 2/3 total amount of investment.
The remained sum is necessary for management of a combination.
Today i opened long straddle of APA (Apache Corp.). It has been bought 33 contracts of OCTOBER'12 87.5 PUT (5.43$) and 33 contracts of OCTOBER'12 87.5 CALL (4.22$). In purchase it has been spent: 9.65*100*33=$31,845. Further i will conduct the combination.
At opening i bought 33 contracts of SEPTEMBER'12 82.5 CALL (3.60$). It has been spent 33*100*3.60=$11.800
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I propose you to observe the process of my next option combination conducting.
Size of investment - 50,000$. For purchase straddle i put no more than 2/3 total amount of investment.
The remained sum is necessary for management of a combination.
Today i opened long straddle of APA (Apache Corp.). It has been bought 33 contracts of OCTOBER'12 87.5 PUT (5.43$) and 33 contracts of OCTOBER'12 87.5 CALL (4.22$). In purchase it has been spent: 9.65*100*33=$31,845. Further i will conduct the combination.
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Thanks very much for the explanation.Personally I need a chart to visualise the P/L, so it's pretty impressive that you assess risk based on the deltas.
You are right about premiums with trading earnings via a straddle/strangle, unless you buy this way in advance, that's why I mentioned that it CAN be good but if there are no movements or the movements are not big enough, you can get burnt...like me in the past....
If IV stays around the same, you'll be making some good profit if GS moves over 105.50 or under approx 92.
Could I just ask how you got to choose specifically GS for a straddle?
I would have expected it just to be bullish, and there are enough other strategies for that.
Look forward to the updates.
Pippovic
Hi Pippovic,
I do not assess risk based on the deltas. Deltas allows me understand how change cost of combination if the share rise or down.
I use a special approach to an assessment. Here i can explain some elements. Before opening straddle i determine when should buy third
position. Also i determine price levels of the share when i need to close the combination or conduct it. For determine suitable price of straddle
i use special technical indicator of the share and historical pricies of straddles "At-the-money".
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Hi Options-trader,Is it possible to put a P/L chart here for your position?
The way I read it you now LONG 80 contracts on the PUT side (AUG95 and SEP100) and 40 on the AUG95 CALL side. If I visualise this, the P/L chart looks very skewed to the bearish side. To me it looks like a lot of risk, should GS continue to rise in the next 2 months and it is currently trending bullish.
Straddles can be good in Earnings season and there is always the possibility for the stock to gap up or down. But I think the earnings announcement for GS is not known yet: GS Company Events | Goldman Sachs Group, Inc. (The) Stock - Yahoo! Finance
I have also checked the volatility on GS and the Implied Volatility for both August and September is lower than the Historical Volatility. This could imply that the stock is slightly bullish.
All together it looks to me like a risky trade, so it would be good to see on a chart what the max loss and profit are in your current position.
Thx!
Hi Pippovic,
i do not use P/L charts in trading. I use a distinctive approach to risk assessment. Delta of the call is about 0.80-0.90, delta of the puts is about 0.60. So in case of rising of the share the total cost of combination will rise.
Total expenses to combination per unit are 8.35+3.75=$12.05. If the share will reach $105.50 before AUGUST'12 95 CALL will expire the cost of combination will return all the expenses.
In my opinion buying straddles before Earning is more risky, because premiums of options are overestimated. And the share can remain near the strike after Earning.
Thanks!
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I propose you to observe the process of my next option combination conducting.Size of investment - 50,000$. For purchase straddle i put no more than 2/3 total amount of investment. The remained sum is necessary for management of a combination.
Today i opened long straddle of The Goldman Sachs Group (GS).
It has been bought 40 contracts of AUGUST'12 95 PUT (3.90$) and 40 contracts of AUGUST'12 95 CALL (4.45$). In purchase it has been spent: 8.35*100*40=33.400$
Further i will conduct the combination.
The price of the share is about $101.30. It is necessary to advance the combination. So i bought 40 contracts of SEPTEMBER'12 100 PUT (3.75$)
In purchase of third position has been spent: 3.75*100*40=15.000$. Total investment to the combination is 48.400$.
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I propose you to observe the process of my next option combination conducting.
Size of investment - 50,000$. For purchase straddle i put no more than 2/3 total amount of investment. The remained sum is necessary for management of a combination.
Today i opened long straddle of The Goldman Sachs Group (GS).
It has been bought 40 contracts of AUGUST'12 95 PUT (3.90$) and 40 contracts of AUGUST'12 95 CALL (4.45$). In purchase it has been spent: 8.35*100*40=33.400$
Further i will conduct the combination.
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15-th of June the calls has expired. The loss of combination is $14.314 or 28.63%.
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Ten minutes before closing the trading session i have sold 8 contracts of JUNE'12 20 PUT ($6.50). Immediately after this i bought 38 contracts of JUNE'12 14 CALL at ask price $1.37.Today i have sold 38 contracts of JUNE'12 20 PUT (6,55$). All contracts of CALLS remain.
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is this all on FSLR?YES, this is all on FSLR.
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Ten minutes before closing the trading session i have sold 8 contracts of JUNE'12 20 PUT ($6.50). Immediately after this i bought 38 contracts of JUNE'12 14 CALL at ask price $1.37.
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The price of share is just below $17, the combination has disbalance of calls and puts, so i have opened 44 contracts of JUNE'12 17 CALL (1.85$).
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Now the price of the share is about 23.40$. It is necessary to fix profit of june put 27. So i bought 44 contracts of may call 23 (2.72$)In purshase of third position it has been spent: 2.72*100*44=11.968$. This is the maximum of investment to the combination.
Today i have sold 44 contracts of JUNE'12 27 PUT (8.65$). Also i have bought 44 contracts of straddle: JUNE'12 20 PUT (3.10$) and JUNE'12 20 CALL (2.20$)
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I propose you to observe the process of my second option combination conducting.Size of investment - 50,000$. For purchase straddle i put no more than 2/3 total amount of investment.
The sum rest is necessary for management of a combination.
Today i opened long straddle of FSLR (First Solar, Inc).
It has been bought 44 contracts of june put 27 (3.90$) and 44 contracts of june call 27 (3.50$).
In purchase it has been spent: 7.40*100*44=32.560$
Further i will conduct the combination.
Now the price of the share is about 23.40$. It is necessary to fix profit of june put 27. So i bought 44 contracts of may call 23 (2.72$)
In purshase of third position it has been spent: 2.72*100*44=11.968$. This is the maximum of investment to the combination.
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I propose you to observe the process of my second option combination conducting.
Size of investment - 50,000$. For purchase straddle i put no more than 2/3 total amount of investment.
The sum rest is necessary for management of a combination.
Today i opened long straddle of FSLR (First Solar, Inc).
It has been bought 44 contracts of june put 27 (3.90$) and 44 contracts of june call 27 (3.50$).
In purchase it has been spent: 7.40*100*44=32.560$
Further i will conduct the combination.
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Today i advance the combination. So i bought 38 contracts of april call 60 (3.70$)In purchase of third position has been spent: 3.70*100*38=14.060$. Total investment to combination is 12.40*100*38=47.120$. This is maximum.
At opening share is trading near 69$. I close all the combination. Sell aprill call 65 at 5.2$ (bid price). Sell call 60 at 9.8$ (bid price). Sell put 65 at 1.53$ (bid price). Investments to the combination per unit was 12.40$. Profit per unit is 4.13$ or 33%!
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Today i advance the combination. So i bought 38 contracts of april call 60 (3.70$)
In purchase of third position has been spent: 3.70*100*38=14.060$. Total investment to combination is 12.40*100*38=47.120$. This is maximum.
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Today i advance the combination. So i bought 38 contracts of april call 60 (3.70$)
In purchase of third position has been spent: 3.70*100*38=14.060$. Total investment to combination is 12.40*100*38=47.120$. This is maximum.
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I propose you to observe the process of my option combination conducting.
Size of investment - 50,000$. For purchase straddle we put no more than 2/3 total amount of investment.
The sum rest is necessary for management of a combination.
Today i opened long straddle of CLF (Cliffs Natural Resources Inc Co).
It has been bought 38 contracts of april put 65 (3.65$) and 38 contracts of april call 65 (5.05$).
In purchase it has been spent: 8.70*100*38=33.060$.
4-th Option Combination 2012
in Options
Posted
Today i have sold 33 contracts of long OCTOBER'12 87.5 PUT ($4.60).