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Strategies & Market Trends : The Options Box -- Ignore unavailable to you. Want to Upgrade?

To: Tim O. who wrote (384)	5/17/2000 3:25:00 AM
From: Mark Z	Respond to of 10876

Fellow night owl: - I don't know where to find the implied volatility of the OEX 'real time' although if anyone knows where that's available, I'd love to have it - I'm not nimble enough to go long/short at the time of the announcement nor am I adept enough at pegging how the market will react - I proved that today!! The other problem is I only use limit orders and its often tough to get filled as things are moving quickly. That's another reason to wait for things to settle down. Obviously, if something totally unexpected and extreme came up, I'd close out the 'losing' side as quickly as I could and let the 'winning' side run. I'd thought of buying OTM calls/puts to protect against extreme moves but I decided the price of protection isn't worth it. Since I've been doing this (about a dozen times now), only once was there an extreme move, that in late 1998 when they lowered rates unexpectedly. - I haven't traded the NDX options because of the prices and spreads. 10 point spreads on those puppies and near the money can run you $100k for 10 contracts. Too rich for me. And I just can't seem to 'get' the QQQ options. The NAZ really has to move - like 100+ pts - to cover spreads & commissions. SPY/DIA I think are viable candidates, I just haven't tried them. SPY & OEX are very close, SPY being a superset of the OEX. - I've never tried volatility expansion. Seems like it would be awfully tough to time and I would think you'd want to do that with leaps or options as far out in time as possible to avoid natural erosion eating into the expansion. Although I suspect the expansion has more effect on nearer term options than longer term ones. I have done earnings plays where you buy in a good month before earnings & then volatility expands as the earnings report approaches but those have only been one side (long/calls) often followed by SAR (sell and reverse i.e. sell the call the day of earnings and buy puts - this works great with YHOO in the spring and summer).