SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe -- Ignore unavailable to you. Want to Upgrade?

To: Bridge Player who wrote (1029)6/14/2004 12:16:39 AM
From: Ira Player  Respond to of 1064
 
Hi Bridge,

While you can, I haven't. When I feel the bias is down, I've bought puts, but haven't hedged them.

You could also, again just an example, do both at the same time, if you feel the market is going to move sideways for a period of time.

For example, if, at the same time I did the call diagonal spread January/September, I also:

Buy January 05 42 puts for $5.20
Sell September 37 puts for $1.75, net $3.45

With both spreads open, the total nut is 8.15 and the value can never be less than $5 because if the price is below 37 at expiration, the put position is worth at least $5 and the same for the calls if it is above.

This position is similar to a butterfly, in that you make the highest "gain" if the stock is at the midpoint at expiration.

Ira



To: Bridge Player who wrote (1029)6/14/2004 11:38:30 AM
From: Ira Player  Respond to of 1064
 
Bridge,

Another point on the put diagonal spread...in conjunction with a call diagonal.

I will be looking more and more at these types of positions as the market gets a little more transparent and available to us retail folks.

The introduction of BOX, with it's price improvement option is a good first step. But until customer orders must be filled or represented as 'best', the bid/ask spread and commissions make it a tough position.

Ira


HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News