optionsstrategies.blogspot.com
Kennynah's Options Strategies: October 2009
http://optionsstrategies.blogspot.com/2009_10_01_archive.html
There was an error in this gadget. Tuesday, October 13, 2009. Rho Rho Rho Your Boat. Put-Call Parity Concept helps to explain several phenomenon in the options world. Particularly in what seems to be a disparity in values of Calls and Puts of the same Strike and same expiration month. For example, given the following scenario :. ABC Stock Price = $80. Interest Rate = 5%. Dividend Payout = $0.25. A 3-month Call - 80 Strike could be $3.75 and yet. A 3-month Put - 80 Strike could be valued at only $3.00.
optionsstrategies.blogspot.com
Kennynah's Options Strategies: November 2009
http://optionsstrategies.blogspot.com/2009_11_01_archive.html
There was an error in this gadget. Saturday, November 28, 2009. Trading Options on Goldman Sachs? GS - Goldman Sachs. As I looked at GS chart, I cant resist wanting to go bearish on this stock. GS is currently trading at $164.16 and has a current Historical Volatility of 33%. Using options, I can construct a bearish play, like so :. Long GS Dec09 165 Put and pay $5.60. Short GS Dec09 170/175 Call and receive $1.14. This position will cost a trader $446 and require a margin of $386. Take a look at GS Opti...
optionsstrategies.blogspot.com
Kennynah's Options Strategies: Why Conversions and Reversals Cause Stock Volume Spikes on Expiration Days
http://optionsstrategies.blogspot.com/2010/02/why-conversions-and-reverses-cause.html
There was an error in this gadget. Tuesday, February 23, 2010. Why Conversions and Reversals Cause Stock Volume Spikes on Expiration Days. To truly understand the cause of volume spikes on Option expiration days, we must comprehend the Put-Call Parity structure that is associated with Conversions and Reversals. Recall an earlier discussion about Put-Call Parity equation. in a gist, a Put is a Call and a Call is a Put. if this sounds confusing, you are on the right track 8-). Retail players do not usually...
optionsstrategies.blogspot.com
Kennynah's Options Strategies: Conversions and Reversals
http://optionsstrategies.blogspot.com/2010/02/conversions-and-reverses.html
There was an error in this gadget. Tuesday, February 23, 2010. Every last but one Fri of the month, across the board, stock volume transactions rise above average daily transactions. why does this happen? Most people will cite that it is because it is this day that equities and index Options and sometimes Futures expire. but so what that these derivatives expire? Why is it that when these derivatives expire, the overall trading volume of equities markets rise? The answer lies in Conversions and Reversals.
optionsstrategies.blogspot.com
Kennynah's Options Strategies: December 2008
http://optionsstrategies.blogspot.com/2008_12_01_archive.html
There was an error in this gadget. Friday, December 12, 2008. FXE - A Gap Up Play. A Short Dec 137/138 Call Spread (with 7 days to expiration). 81% chance of success and a risk/reward of 7 : 1. Taken into consideration is also that 138 has a higher IV than 137.giving an edge in this position. Subscribe to: Posts (Atom). There was an error in this gadget. Kennynah's Investment and Strategies. View my complete profile. Followers (Get notified whenever new blogs are published).
optionsstrategies.blogspot.com
Kennynah's Options Strategies: January 2009
http://optionsstrategies.blogspot.com/2009_01_01_archive.html
There was an error in this gadget. Wednesday, January 21, 2009. When Things Go Wrong - Repair Strategy. If, whenever you puchase a stock and it rises, all is well and this post is redundant. On the other hand, like some of us mere mortals, you have purchased stocks that had the audacity to fall in price, this Repair Strategy may be useful. Let's randomly choose a stock, Citibank, for purpose of illustrating this Repair Strategy. This is 50% decline in value of the stock. However, life as a I/T is hardly ...
optionsstrategies.blogspot.com
Kennynah's Options Strategies: What is a Conversion?
http://optionsstrategies.blogspot.com/2010/02/what-is-conversion.html
There was an error in this gadget. Tuesday, February 23, 2010. What is a Conversion? Simply explained, a Conversion. Is a Long stock AND a synthetic Short position; for example :. Say AAPL is at $200 now. Long AAPL @ $200 (this is the Long stock position). Short AAPL 200 Call Long AAPL 200 Put (this combo is the Short synthetic stock). If stock price moves up, the Long stock position profits but the Short synthetic stock position loses about the same amount, resulting in very little fluctuation in the P/L.
optionsstrategies.blogspot.com
Kennynah's Options Strategies: February 2010
http://optionsstrategies.blogspot.com/2010_02_01_archive.html
There was an error in this gadget. Thursday, February 25, 2010. Option Strategy During Earnings Season. Option Strategy During Earnings Season. Very often, stock prices can gap up or down on the next opening session, immediately after quarterly earnings are announced. Such directional risk can be largely mitigated by using the underlying Options. 200 of Long $200 Call Options. By having Long Calls, any upside gaps next morning will protect your Short stock positions. Short 100 shares AAPL @ $200. Short 1...
optionsstrategies.blogspot.com
Kennynah's Options Strategies: September 2009
http://optionsstrategies.blogspot.com/2009_09_01_archive.html
There was an error in this gadget. Sunday, September 27, 2009. The Sobering Truth about Options Trading. After a while, options traders will come to a sobering realisation. That in a long run, if options premiums are always fairly priced, then the options trader should result in breaking even in all his options trades (exclude commission fees).but only theoretically, because in reality Options premiums are almost always skewed to the disadvantage of the retail options traders. But why does this happen?
optionsstrategies.blogspot.com
Kennynah's Options Strategies: Explaining Risks through Greeks
http://optionsstrategies.blogspot.com/2009/12/explaning-risks-through-greeks.html
There was an error in this gadget. Tuesday, December 22, 2009. Explaining Risks through Greeks. Let's use SPY trading at $108.20 with 11 days to expiration.the following Greeks for a Long Nov 109-strike Call are :. Delta : 0.41. Gamma : 0.1. Theta : -0.06. Vega : 0.08. We move on to more specific Greek talk. Why is this ve 0.41 delta, the biggest risk? A ve gamma is always associated with any Long options. remember, ve gamma has nothing to do with directional bias. this means, one can Long Call o...Hence...
