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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (775)	2/24/2003 5:51:12 PM
From: Allen Furlan	Read Replies (2) \| Respond to of 1064

Hello thread. Many years ago I was concerned with volatility, ie which was the best option to buy or sell. Even developed simple formula by calculating the integral of a triangular approximation using a 4 sigma spread on each side of current price and assuming that the stock would respond to change based on square root of time interval. This approach did not help one iota in successfully trading options. For the past 5 years or so I have had a reasonable degree of success by looking for special situations, ie vulture strategy. Let me give you several examples of recent trades. Last week sold 10 calls and 10 puts on vxgn, uwgta(1.00) and uwghg(1.10). Rationale here was that there was little likely hood that stock would spike up to 35 on good news on vaccine. Today stock collapsed and I was still able to buy back the puts for 1$, leaving me with very satisfactory naked position in calls. For tyke, look at sgr 2005 puts strike price 5 for about 1.10. Glassman in Washington Post hyped this company last Sunday. I already have a boatload of naked puts on this very decent company. For past several weeks I have been doing ratio writes of rmbs 2005 calls 30 strike and buying the 25 calls with money in my pocket with 5/4 ratio. This complements a much smaller 30 strike call and 10 strike put combination write. My rationale here is that rmbs is over hyped and unlikely to quickly climb to 30. I will sell off the 25s in December and in 2004 if my rationale is correct. Anyhow what is the strategy of members of this thread once you have calculated volatility.