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Ira,
Thanks for your reply. It will take me some time to get to your level of
trading if at all. I will study your reply in detail and try to master the
action and how to play it. I never trade what I can't understand and
conceptually I am still in the fog unfortunately and will likely be there
for a while.
don
----- Original Message -----
From: "Ira Tunik" <ist@xxxxxx>
To: <realtraders@xxxxxxxxxxx>
Sent: Saturday, December 09, 2000 10:06 PM
Subject: Re: [RT] Re: Trading Events
> Don:
>
> There are many ways to trade volatility using the underlying and
derivatives.
> The big up stairs traders use the S&P, NASD and now other index futures
and
> trade them against bundles of stock that replicate the future. For the
day
> trader or smaller trader there are positions of options against options
and
> options against the underlying. One example. The night before the first
Friday
> of the month, when all the reports come out. you buy 10 at the money bond
calls
> and short 5 of the futures. That would be putting on what is known as a
delta
> neutral position. If the bonds spike up you liquidate some of the calls
to
> neutralize the position again. If the underlying spikes down you buy in
some of
> the futures to neutralize the position. So if you get a major pendulum
swing
> up and then down you would sell out calls and then on the swing down buy
in
> futures. You can do it long puts and long futures. You can do it with a
> greater ratio on out of the money calls or out of the money puts. It all
> depends on what you feel the range of the swing can be and the degree of
> leverage you are looking for. With INTC, AAPL, NOK and many others
either
> calls or puts against the underlying would have made you a lot of money.
With
> no move, liquidate the position and you have lost the opportunity cost.
> Commissions and maybe some volatility loss in the options. There are
numerous
> other strategies that allow for leverage under these conditions. You
always
> look for positions with unlimited profit in either direction and limited
risk.
> With positions noted above the higher it goes the longer you get or the
lower it
> goes the shorter you get. It is always nice to be able to buy into
weakness or
> sell into strength and take a profit home. HOpe that this helps a little
and
> gives you a few ideas. Have a good week end. Ira
>
> Don Ewers wrote:
>
> > Ira,
> > Can you enlighten us with an example, since I only trade, "what are
billed
> > as major event s" from the "news reversal trading technique". Obviously
your
> > expertise utilizing options would be a welcome trading technique that we
may
> > be able to learn from. I normally go flat ahead of these events feeling
it
> > is gambling in lieu of trading, so I am anxious to hear your reply.
> > don ewers
> > ----- Original Message -----
> > From: "Ira Tunik" <ist@xxxxxx>
> > To: <realtraders@xxxxxxxxxxx>
> > Sent: Thursday, December 07, 2000 1:22 AM
> > Subject: Re: [RT] Dow
> >
> > >
>
>
>
> To unsubscribe from this group, send an email to:
> realtraders-unsubscribe@xxxxxxxxxxx
>
>
>
>
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