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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (9414)	2/4/2006 3:13:55 PM
From: GROUND ZERO™	Read Replies (2) \| Respond to of 12411

Hi Bob, You are correct, that's the whole idea behind selling options, sell them when the price is better than the market could offer for the underlying futures contact or stock... they can be placed at the same time, or do one side at a time... I prefer to do one side at a time, i.e., selling the Call in the rally and the Put into a sell off, whichever comes first... in my current trade, I'm short the underlying contract, so my bias is to the short side... but, to take better than 40 points out of the market even if the market doesn't move 40 SP points, I sold both the Call and the Put... this gives me those 40+ points and now I'll make that money even if the market only goes sideways... I really like this strategy, and I think it should be used more often by traders, but I also think many traders really don't understand options, so they shy away from them... options provide a great way to maneuver in these markets, it give the trade an additional dimension... GZ

To: robert b furman who wrote (9414)	2/4/2006 3:26:40 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 12411

I've repeatedly sold puts on stocks I wanted. Even now I sell calls on stocks I would sell as long as the tax basis falls outside the one year hold. The only butterfly I ever did was on Midlantic Bank. Made a boatload because Midlantic was taken over by PNC Bank. Normally butterflys are done almost simultaneously. Basically, if I recall correctly, you are betting on flat trading/Low volatility. As long as everything stays in a range you make it both ways as premium erodes. If it breaks one way or the other you make money because premium builds on the one side while it decays on the other. But the Time Value of Money works for you on both sides.