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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: TREND1 who wrote (63925)5/8/2002 2:20:49 PM
From: Carl R.  Read Replies (1) | Respond to of 99280
 
Exactly correct. The key is to stay Delta neutral, but you can get bitten if the stock gaps (only if it gaps the wrong way). But as expiration approaches, the delta drops on out of the money options, so you have to slowly close your hedge to stay delta neutral, which tends to push the stock towards the Max Pain point. Note however that it is just a gentile nudge, and in most cases the other market variables are more significant.

Carl



To: TREND1 who wrote (63925)5/8/2002 2:21:37 PM
From: Jeffrey S. Lillie  Read Replies (1) | Respond to of 99280
 
Hey Larry,
Do you have an interday update on the channels? Curious to see where this monster day puts us. Got to be close to violating top of channel. Last time was a trick, will this one be as well. Time will tell.
I raised some cash on this gift bounce and will re enter with a third of it if we get a decent pullback before the close to be sold after open( if we go up that is)
Thanks,
Jeff


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