101Option Trading Secrets Section 2 doc

... orange trees in sev- eral states. This resulted in orange juice prices racing up from $1 .25 per pound to over $2. 20 per pound, and a 1-cent move is

Ngày tải lên: 03/07/2014, 15:20

... OF OPTION SPREADS BEWARE OF SLIPPAGE! One of my major rules of successful option trading is to minimize your trading. There are high costs to option trading. Not only are there commissions, but also there is slippage—the distance ... PFE Jan 40 call for 2, you could offset the cost of that option by writing or selling the PFE Jan 45 call for 1. Now the cost of your position is only 1 po...

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... advantage we can in the market. One important trading tactic that has a big advantage over traditional trading is internet trading. Traditional trading, telephone trading, where you have to call a broker ... class="bi x0 y21 w3 hc" alt="" Secret 75 THE HIDDEN COST OF TRADING When we talk about the cost of trading, we usually think of commissions, but there is an even greater cost...

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... Hidden Cost of Trading 21 7 76 Act Like a Market-Maker 22 1 77 Test the Waters—How to Get the Best Price 22 3 78 You Can Buy the World for 1/8 22 5 79 How to Enter Spread Positions 22 7 80 Secret Spreading ... Spreads 20 1 70 Avoid Delta Neutral Strategies 20 3 71 Avoid Repair Strategies 20 5 72 How to Reduce the Cost of Option Buying 20 7 73 Rules of the Road 20 9 Section 7:...

Ngày tải lên: 03/07/2014, 15:20

... example, if you own 100 shares of Pfizer priced at 40 and write the Pfizer Jan 45 call at 2, you receive $20 0 to your account but are obligated if Pfizer is above 45 and you are exercised to deliver ... it falls to 35, rather than placing a limit order to buy the stock at 35, write a Jan 35 put at 2 ( $20 0). Now if Pfizer is at or below 35 at expiration or if you are as- signed before then...

Ngày tải lên: 03/07/2014, 15:20

... Make sure you buy undervalued and sell overvalued. 2. What is your probability of profit if you hold the position to expiration?

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... stop. However, stops are designed to prevent disasters to your portfo- TRADING TIPS 24 8

Ngày tải lên: 03/07/2014, 15:20

... mathematical advantage. TRADING TIPS 26 2 Secret 92 HOW TO USE OPTION ADVISORY SERVICES Having written an option advisory newsletter as early as 1973, I have found the secrets of how to use and ... with the type of trades and analysis that you find successful. TRADING TIPS 26 0

Ngày tải lên: 03/07/2014, 15:20

... 1 Total profit = 1 .25 (1 + .25 ) Position did not hit stop. 2. Date entered September 12, 20 02 Buy Duke Energy (DUK) Jan 27 .5 call Duke Energy is at 22 .54 Sell DUK Oct 25 . call Stop at 26 Spread credit ... I entered on September 23 , 20 02 when EP was 7.51. Here I : 1. Bought EP Jan 20 04 5 call at 4 2. Sold EP Jan 20 04 15 call at 1.9 3. Total cost and risk of 2. 1 The po...

Ngày tải lên: 03/07/2014, 15:20

... now at 23 , which means we are working with an out-of-the-money option. One month passes, and the stock has moved from 23 to 24 . The Intel Oct 25 has depreciated in value from $300 to $20 0, even ... what this section is all about, teach- ing you the basics of option trading. (The good stuff comes later.) Let’s begin. Throughout the tutorial, we will use stocks to explain option tra...

Ngày tải lên: 03/07/2014, 15:20