SPI 200 and Futures Options

[Pit Trader]

Confidentiality issues aside --- HF's execute thru PB with the iBanks - are you that big a player - i.e. millions in AUM?

It's an insult to HFunders to suggest that they're selling into upside curvature PLUS not hedging into the event - not to mention the alternative products available to them to take these price bets with < risk [relative to convexity]

I never mentioned being a big player.
I have seen the statements there is no reason for me to
make any of this up.It's fact.

 

[wayneL]

Look you want to insult me,you don't like my methods then move on.
You don't want to be educated you just want to tell everyone how much you know and how 6 years on a forum makes you a great trader.

HAHA!

Forums are about discussion and debate, you want submissive fools to fawn over a method with a high risk of ruin.

Where are these purported insults?

Where are my claims of being a great trader?

Sorry Pit, straw man arguments don't work on the intelligent folk here at ASF.

You could try using logic instead? Perhaps even answer my query re margin rather than deny the market may still move against you?

Remember LTCM?

 

[mazzatelli]

I never mentioned being a big player.
I have seen the statements there is no reason for me to
make any of this up.It's fact.

My point is the brokers they use is out of your league unless you have notionals in the millions. Yet you are suggesting you share the same broker as them.

...and I know for a fact they don't

 

[cutz]

Look you want to insult me,you don't like my methods then move on.
You don't want to be educated you just want to tell everyone how much you know and how 6 years on a forum makes you a great trader.

No one is out to insult you Pit Trader,

You're copping a grilling because your style goes against what many consider to be sensible option trading.

The fact of the matter is when markets are quiet WTFOTM contracts are not even worth trading ( selling short ) from a risk reward point of view, if you consider your timing to be so impeccable that you can face the abyss and sell put options when everyone else is buying you would be better off trading futures.

There are certain aspects about your methods that just don't gel.

 

[Pit Trader]

HAHA!

Forums are about discussion and debate, you want submissive fools to fawn over a method with a high risk of ruin.

Where are these purported insults?

Where are my claims of being a great trader?

Sorry Pit, straw man arguments don't work on the intelligent folk here at ASF.

You could try using logic instead? Perhaps even answer my query re margin rather than deny the market may still move against you?

Remember LTCM?

I hedge my position in the futures market if it gets to my strike.
This has only hapened once in 8 years.

 

[wayneL]

I hedge my position in the futures market if it gets to my strike.
This has only hapened once in 8 years.

Yeah if the margin call hasn't taken you out beforehand.

 

[Pit Trader]

No one is out to insult you Pit Trader,

You're copping a grilling because your style goes against what many consider to be sensible option trading.

The fact of the matter is when markets are quiet WTFOTM contracts are not even worth trading from a risk reward point of view, if you consider your timing to be so impeccable that you can face the abyss and sell put options when everyone else is buying you would be better off trading futures.

There are certain aspects about your methods that just don't gel.

You dont need the markets to be volitile to sell options.Just a good move in a certain direction which usually happens in a 3 month period.I fade the move by selling the options.I actually do trade Spi everyday but do not hold on overnight.I watch the market everyday so I get a good feel for what's going on.

 

[Pit Trader]

Yeah if the margin call hasn't taken you out beforehand.

That is why I sell puts and calls so I dont have all the eggs in one basket.

 

[cutz]

I hedge my position in the futures market if it gets to my strike.
This has only hapened once in 8 years.

If you don't mind run us through the event, strikes/dates/contract type/size/outcome.

 

[Pit Trader]

My point is the brokers they use is out of your league unless you have notionals in the millions. Yet you are suggesting you share the same broker as them.

...and I know for a fact they don't

You may be right..but i'm telling you what I saw.This guy had GBP as his currency not AUD and it was millions in an off shore account.

 

[wayneL]

That is why I sell puts and calls so I dont have all the eggs in one basket.

LOL

How is that going to help you?

The call premium will be a drop in the ocean, no help if you get hit with a vega bomb.

 

[Pit Trader]

If you don't mind run us through the event, strikes/dates/contract size/outcome.

OCT 2008 I had 3500 puts(DEC EXP)15 lots and Lehman went under the market traded through me an I had to sell 15 lots and sit on them.

 

[Pit Trader]

LOL

How is that going to help you?

The call premium will be a drop in the ocean, no help if you get hit with a vega bomb.

Thats correct..but the point is my position is small enough to hedge.
I can trade around 15-20 lots not 50 -100 lots in the futures market.

 

[cutz]

OCT 2008 I had 3500 puts(DEC EXP)15 lots and Lehman went under the market traded through me an I had to sell 15 lots and sit on them.

Why did you sell 15 lots of futures ? Now you've swung position delta the other way.

 

[Pit Trader]

Why did you sell 15 lots of futures, wouldn't you have been better of buying back the options.

Because my strike was 3500 and the market traded there and i was short 15 puts.

 

[Pit Trader]

Because my strike was 3500 and the market traded there and i was short 15 puts.

Why buy them back at a loss when you can hedge and limit the losses to slippage and Brokerage.

 

[cutz]

Why buy them back at a loss when you can hedge and limit the losses to slippage and Brokerage.

But by now you have already booked a loss, buying back put contracts to swing delta is the same as selling futures.

Remember, the SPI has already taken out the strikes, then you over neutralized delta.

 

[Pit Trader]

But by now you have already booked a loss, buying back put contracts to swing delta is the same as selling futures.

There is no loss if I'm short puts @3500 and then sell futures @ 3500.
If the market drops I'm fully hedged if it rises I get out of my hedge.
I cant see the loss.

 

[wayneL]

Thats correct..but the point is my position is small enough to hedge.
I can trade around 15-20 lots not 50 -100 lots in the futures market.

So ATM you're flipping delta from ~.5 to ~-.5

You're going from an ATM short put (and seriously down a hole) to an ATM synthetic short call and playing a stop and reverse game.

I'd rather you than me.

 

[Pit Trader]

So ATM you're flipping delta from ~.5 to ~-.5

You're going from an ATM short put (and seriously down a hole) to an ATM synthetic short call and playing a stop and reverse game.

I'd rather you than me.

That is correct...as long as i sit on the position I am in control of everything.
It has happened once in 8 years.