101Option Trading Secrets Section 7 doc

... Secret 74 GO ONLINE! It is important that we gain every advantage we can in the market. One important trading tactic that has a big advantage over traditional trading is internet trading. Traditional ... 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 of trading, and...

Ngày tải lên: 03/07/2014, 15:20

... collapsed, the stock price dropped to 7- cents and stopped moving down on huge volume. Knowing that even bankrupt stocks will hold a small premium, and that 7- cents was the bottom of that market where ... crashes occurred in Octo- ber, including the crash of 1929, the crash of 19 87, the crash of 1989, and the crash of 19 97. No question that the best time to buy stocks is near the end of...

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 ... class="bi x0 y4 w1 h3" alt="" Section 6 Spreading

Ngày tải lên: 03/07/2014, 15:20

... 201 70 Avoid Delta Neutral Strategies 203 71 Avoid Repair Strategies 205 72 How to Reduce the Cost of Option Buying 2 07 73 Rules of the Road 209 Section 7: Trading Tactics 74 Go Online! 213 75 ... Hidden Cost of Trading 2 17 76 Act Like a Market-Maker 221 77 Test the Waters—How to Get the Best Price 223 78 You Can Buy the World for 1/8 225 79 How to Enter Spread Positions 2...

Ngày tải lên: 03/07/2014, 15:20

... 19 87, one investor who was naked just 3 index puts saw a loss of $120,000 overnight. Another investor started with $15,000 two years before that crash and made, writing naked index options, $75 0,000; ... to 37. With one day before expiration, the HON Aug 30 put had a bid of .3 and an asked of .8. Frank put in an order to sell 10 HON Aug 30 puts at .40 ($40), and at the end of Thursday’s tr...

Ngày tải lên: 03/07/2014, 15:20

... IBM Stock Price is at 70 : $70 0 Profit × 10 % $70 Now let’s add up all the results of these multiplications: – 90 IBM at 60 or lower 0 IBM at 63 + 40 IBM at 65 + 70 IBM at 70 + $20 Profit or Loss ... of the stock is as follows: IBM Stock Price Probability Profit or When Option Expires Loss 70 10% + $70 0 65 20% +$200 63 40% 0 Below 60 30% (-$300) Note: Commissions not included. Now we...

Ngày tải lên: 03/07/2014, 15:20

... prevent disasters to your portfo- TRADING TIPS 248

Ngày tải lên: 03/07/2014, 15:20

... mathematical advantage. TRADING TIPS 262 Secret 92 HOW TO USE OPTION ADVISORY SERVICES Having written an option advisory newsletter as early as 1 973 , I have found the secrets of how to use and ... do your homework, and that homework involves using the knowledge and tools available on the web. TRADING TIPS 258 intermediate bonds, especially if rates are low. To cover some of the curren...

Ngày tải lên: 03/07/2014, 15:20

... September 19, 2002. Buy Bank of America (BAC) Nov 75 call BAC is at 63.35 Sell BAC Oct 70 call Stop at 71 CONTENTS 285 Spread credit of .25 Value of Nov 75 call at Oct expiration is 1 Total profit = ... bought the Cisco Jan 03 17. 5 call at 4 1/2 and sold the Cisco Jan 03 45 call at 1 for a spread price of 3.5 when Cisco was 13 .7. The spread reduced the cost of the 17. 5 call by 1 point...

Ngày tải lên: 03/07/2014, 15:20

... the difference between the strike prices of the spread; i.e. 70 75 is a 5 point spread.) Using the IBM ex- ample, you will see that 75 70 is the spread, and the cost of the spread is 2, so the maximum ... the IBM 70 75 spread would be 150% (300/200= 150%). A probability calculator can be used to measure your probability of achieving such re- turns. With the IBM spread, IBM must close above...

Ngày tải lên: 03/07/2014, 15:20