maybe no sell in may syndrome this year.
maybe still too early to tell.

1615... ka-ching!
It may continue to push up.. but time for me to lock in some profits in long positions and put some cash aside, letting
the rest trail.

ya, 1615 hit and also apple's 450 hit.
next?

Book the some profits and let it trail-lah.. what else. You never know.. if all time high, the mentality will change anytime.

lose steam already.....release my puts....

I always think such theory is BS. no offence to those believer. LOL

This post has been edited by foofoosasa: May 3 2013, 10:08 PM

The market always surprises people.. when you least expect it, it will happen and when you most anticipate it, it won't happen or.. as some would claim that as .."we're not wrong, we just too early".

, sometimes really feel it is pointless to do so already.

Dow 15000...is here. Hee Haw..

triangle flag break out

This post has been edited by countdown: May 3 2013, 10:44 PM

need your guys help on my experiment. i tested out small contract on hedging via straddle/strangle but to no avail.

Initially opened ATM straddle, then let say today Call leg is making money but Put (let say net $100). Then, the chart start to reverse or no reverse, immediately I roll up/down Put with the same delta and everything with the Call, shouldn't the profit frm the Call leg (net $100) is already locked in? However, I still see money lose even doing so due to the profit gained from the Call leg is unable to cover the bid/ask spread loss of the new Put?

Assuming the roll up/down is on the same day, hence not much decay or vega (no earnings or crazy news) involved.

This post has been edited by countdown: May 3 2013, 10:58 PM

You lost me on the part about "chart start to reverse or no reverse, immediately I roll up/down".

Can you give more specific example?

Say stock XYZ trading at price 100, you started a long straddle ATM (buy one call @ $1, one put at price $1.., total=$2).
So what happens next, again?

This post has been edited by danmooncake: May 3 2013, 11:13 PM

XYZ $100 -> ATM straddle let say premium $2 with $1 Call & Put each similar to above. Delta for both is around 0.50 each assuming other greeks are not much changes.

XYZ goes up to $103 -> by right not much profit, somehow the P/L showed net $100 profit. The Call delta is now let say 0.60 and the Put is 0.40, doesn't really matter whether there is a reversal or not, I want to lock in the $100 profit, so I roll up with a new Put from 0.40 to 0.60 delta, of course with 0.60 delta the strike price is also different already. But the P/L shows a loss.

I was wondering is the lost due to the bid/ask spread of the new Put or the slight vega changes (was ignore earlier) of both Call & Put? Couldn't confirm.

This post has been edited by countdown: May 3 2013, 11:25 PM

When XYZ goes up $103, you should have $1 in profit (intrinsic) because you pay $2 in premium ($3-$2).
Your call value should be more than $1, but your put value should be below $1.
The thing I that still not clear is the part about your CALL delta 0.60 and PUT is 0.40. ?

When you roll up, you will pay for ask price and bid price to close up previous strike. Yes, there is your spread premium that you have to pay up. When you roll up, you're not really locking in your profit. You're just closing the previous position and opening up a new one with a different calendar or strike price. Does that help?

Let say my profit is huge enough ($100) to cover the spread (-$20), will it shows min profit of $80 i.e. the white line above the zero in TOS?

I also found out that there is vega drop for both Call & Put (compared to yesterday's close) after the positive news, thus can't ignore the vega as I assumed earlier .

Once the XYZ goes up, Call delta will increase to (.60) and a decrease in Put's delta to (.40).

This post has been edited by countdown: May 4 2013, 12:11 AM

Thank you for your guidance, Danmoon and Yok!

Guys,

Be careful going long this week...

Just to make you aware before you start your journey. With stock option you can make lots of money and lose quite a lot as well. It is not straight forward like stock as it has multiple variables that affect the option price and at least one of this variable has quite significant impact in addition to underlying stock price. Without attending any formal class, you may take several months or years to learn on your own and then make money. Maybe faster if you can grasp the concept fast. Let see what type of leading you need after a month learning. The strategies are not platform specific, so should not be a problem for you.

Where in KL can I open a US stock exchange account, with live prices? Or are there better alternatives?