Diagonal Spread (Ressources)
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Modifié le 22/9/2007 11:37
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Les liens et outils pour la stratégie "selling options against LEAPS or stocks"
THESAURUS
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1 de 19
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Modifié le 22/9/2007 11:38
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Ressources de la stratégie,
c-à-d, la vente de contrats à court terme contre des contrats à moyen terme (LEAPS) déposés en garantie sur le compte.
qqes liens de référence:
http://www.fintools.com/doc/options/optionsGlossary.html
http://www.fintools.com/doc/options/index.html
http://www.get122.com/covered-calls.htm
THESAURUS
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2 de 19
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Modifié le 22/9/2007 11:39
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Calendar Spread Option Strategy, http://www.mindxpansion.com/options/calendar-spread.html
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When you are fairly neutral on the market and you want to generate additional income from your investments, there is an option strategy that is worth your consideration. This strategy involves selling an option with a nearby expiration, against the purchase of an option (with the same strike price) which has an expiration date that is further out.
A Calendar Spread is an option spread where the strike prices are the same, but they have different expiration dates. These spreads are also referred to as horizontal spreads or time spreads.
Calendar spreads can provide a way to add value to your portfolio through your purchase of a long term option with a reduced cost basis, provided by a near term option that you sold.
One very favorable point to a Calendar Spread is the value of time decay. Although both options lose time value as time passes, the option you sold loses value much more quickly than the option you bought. Therefore, if your prediction of a neutral market is correct, the value of your Calendar Spread will increase as time passes. A Calendar Spread takes advantage of time value differentials during neutral markets.
When the near term option expires, you have several alternatives. If you are still predicting a neutral market, you can hold on to your long position, if there is sufficient time left on it, and sell another short term option against that long position. If you are dealing in calls and you fear that the market may go down, you can close out your long position and take the profits. If you are dealing in calls and you predict a more bullish market, you could just hang on to your long position and take a larger profit in the future. In any of the cases, your cost basis on your long position was reduced by the premium you collected from the option you sold.
Another popular way the calendar spread is employed is in the simple rolling out of a position nearing expiry to a later month. If you have sold a covered call and it is about to expire, you may want to roll it out to a later month to collect more premium. This is also done to avoid having the stock called away from you.
It is also important to cover risks and caveats of this strategy. Your loss is limited to the net premium you paid (the money you paid for the option you purchased minus the money you received for the near-term option you sold.
When we implement spreads of this nature, we try to buy long term options that are undervalued. A good option program like Option-Aid, can help you verify that the long term option is undervalued. For the short position, we look for options that are overvalued, since we are selling that position. Option-Aid can also help you verify that your short position is overvalued. This strategy helps to maximize our profits.
There are many different ways to implement a Calendar Spread, depending on your goals and your market outlook.
One popular implementation of the Calendar Spread is try to generate income similar to a Covered Call strategy, but involves buying LEAPS (Long Term Equity Anticipation Securities) instead of the actual stock. So calls are sold against the LEAPS instead of the actual stock. This is done because the LEAPS can be purchased much more cheaply than the actual stock, which can generate much higher returns on invested capital. The risk with this implementation is that the underlying stock goes down in price instead of staying neutral, causing your LEAPS to go down in value. If the underlying stock goes up in price at expiration of the near term option (instead of staying neutral), you could buy back the option you sold and then sell another option, one or more months out.
When you implement this type of spread, you are hoping that the near term option you sold expires worthless. Then you can sell more options a little further out and continue to collect more premium. This either decreases the cost basis of the LEAPS you purchased, or produces recurring income for you.
It is important to analyze your expectations for the underlying asset and for the market before selecting your strategy.
When you are analyzing potential option positions, it helps to have a computer program like Option-Aid that swiftly calculates volatility impacts, probabilities, statistics, and other parameters of interest. These programs can pay for themselves with the first trade that they help you with.
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3 de 19
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Modifié le 22/9/2007 17:18
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Ressources : http://www.888options.com/resources/literature/options_central.jsp
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http://www.888options.com/resources/literature/oic_updates.jsp
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http://search.freefind.com/find.html?query=volatility&id=15274994&pageid=r&mode=ALL&n=0&nsb=&s=888&x=15&y=14
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4 de 19
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Modifié le 24/9/2007 23:27
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Glossary of Options Terms
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Ask – The price at which a seller is offering to sell an option or stock.
At-the-Money – an option is at-the-money if the strike price of the options equals the market price of the underlying security.
Bear-Put Spread – When you sell a lower strike put and then buy a higher strike put. This trade has limited profit, but also you limit your risk. A fall in the underlying stock price increases the value of the spread.
Bid – The price at which a market maker is willing to buy a security (buy it from you).
Whenever a quote is obtained, the bid is always the smaller number (on the left-hand side).
Bull-Call Spread – When you buy a lower strike call and simultaneously sell a higher strike call.
This trade has limited profit but also you limit your risk. A rise in the underlying stock price
increases the value of the spread.
Buy Write (also see Covered Call) – Having a long position in an asset (stock), combined with a
short position in a call option on the same underlying asset. The covered call option strategy is one of the most widely used by investors.
Call Option – In the financial world, a call option gives the option buyer the right, but not the obligation,
to buy something (or to “call” it away from the owner) at a specified price over a specified period of time.
Chicago Board Options Exchange (CBOE) - The Chicago Board Options Exchange; the first national exchange to trade listed stock options.
Covered Call (also see Buy Write) – Having a long position in an asset (stock), combined with a short position in a call option on the same underlying asset. The covered call option strategy is one of the most widely used by investors.
Expiration Date - The day on which an option contract becomes void. The expiration date for listed stock options is the Saturday after the third Friday of the expiration month, so for all trading purposes it is the third Friday of each month.
In-the-Money – For a call option, when the option’s strike price is below the market price of the underlying stock. For a put option, when the strike price is above the market price of the underlying stock.
Leverage – In investments, the attainment of greater percentage profit and risk potential. A call holder has leverage with respect to a stock holder – the former will have greater percentage profits and losses than the latter, for the same movement in the underlying stock.
Margin – Borrowed money that is used to purchased securities. This practice is referred to as “buying on margin.”
Margin Call – A broker’s demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. This is sometimes called a “fed call.”
Option – A security sold by one party to another that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security at an agreed-upon price during a certain period of time
Options Starter Kit: A Step-by-Step Guide to Options Trading • 15
on or before a specific date.
Options Clearing Corporation (OCC) – The issuer of all listed option contracts that are trading on the national option exchanges.
Options Contract – Denotes the deliverable quantity of goods – options are traded in contract units. Each option contract represents 100 shares of the underlying stock. Hence, it’s necessary to multiply any option premium quote by 100 to get the true cost to the option buyer (or seller).
An option quoted for $2.50, really costs $250 for each contract.
Out-of-the-Money – For a call, when an options’s strike price is higher than the market price of the underlying stock. For a put, when the strike price is below the market price of the underlying stock.
Premium – The total cost of an option. The premium of an option is basically the sum of the option’s intrinsic and extrinsic (time) value.
Profit Maximizer – An advanced strategy for ChangeWave Inner Circle members intended to turbo-charge your profits from a ChangeWave Investing recommendation.
Put Option – A “put” option, in the financial world, gives the option buyer the right, but not the obligation, to SELL a stock (or “put” it to someone else) at a specified price, over a specified period of time.
Strike Price – The stated price per share for which an underlying stock may be purchased (for a call) or sold for a (put) by the option holder upon exercise of the option contract.
Time (Extrinsic Value) – The difference between an option’s price and the intrinsic value. Also known as “time” value. Extrinsic value is made up of several important variables: the number of days left until expiration, volatility, prevailing interest rates and dividends.
Trailing Stop – A stop-loss order that is set at a percentage level below (for a long position) the market price. The price is adjusted as the price fluctuates (it is not adjusted downward).
Volatility – A measure of the fluctuation in the market price of the underlying security. Mathematically, volatility is the annualized standard deviation of returns.
Volume – The number of shares or contract that is traded in any given period of time within a security or an entire market.
Wasting Asset – An asset that declines in value over time. An option is an example because it is only valuable until expiration, after that is becomes worthless.
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5 de 19
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Modifié le 30/9/2007 22:17
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WebCast Learning : http://www.cboe.com/LearnCenter/webcast/archive.aspx
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6 de 19
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Modifié le 05/10/2007 08:27
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Certaines techniques demandent un niveau d'autorisation :
Spread Option trading:
Trading Level 4 Equity Put Writing/Credit Spreads
voir; https://us.etrade.com/e/t/estation/help?id=1304010000#View
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7 de 19
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05/10/2007 08:26
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Gamma-Delta Neutral Option Spreads
- http://www.investopedia.com/articles/optioninvestor/07/gamm_delta_neutral.asp
Note, ces techniques utilisent deux positions, une dont vous êtes "Long" et l'autre "Short"
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Voir également ci dessous
THESAURUS (Cliquer Ici)
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8 de 19
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06/10/2007 02:43
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Explanation and Application http://www.thinkorswim.com/tos/displayPage.tos?webpage=lessonTimeSpreads
Time spreads are so called because they are positions with options in two different expiration months, with the options being either both calls or both puts. Time spreads involve buying an option in one expiration month and selling another option in a different expiration month but with the same strike as the first option. Specifically; a long call time spread is selling a call in a front month at a certain strike, and buying a call in a deferred month at the same strike. A put time spread is selling a put in a front month at a certain strike, and buying a put in a deferred month at the same strike. A short call time spread or put time spread is simply the reverse of the long time spread: long front month and short deferred month. In time spreads, one option in the position expires before the other. You have to keep this in mind because it does present certain risks and necessary adjustments that other types of positions might not.
Time spreads, whether they are call time spreads or put time spreads, maximize their value when the stock is at the strike price of the options, and the front month option is expiring. Time spreads have their minimum value when the stock is very far away from the strike price of the options. If you buy a time spread you want the stock price to be at the strike price at expiration. If you sell a time spread you want the stock price to be as far away as possible from the strike price at expiration.
Therefore, a long time spread might be a good position if you think the stock price is going to move to, then stay at, a particular strike price until expiration of the front month option. The maximum risk of a long time spread is the amount paid for it. The maximum value depends on the value of the deferred month option when the front month option expires. That depends largely on the implied volatility of the deferred month options.
Another risk of time spreads is that of assignment of the short option, which will transform your time spread into another position. For example, a long put time spread has the risk of assignment on the short front month put. If the short put is assigned, you will receive long stock in your account. That, along with the remaining deferred month put, is a synthetic long call. This position does not have unlimited risk. But it is significantly different from the original long put time spread and could require a great deal of cash or margin in your account to be able to hold the long stock position. You must be aware, then, of the sometimes significant risks due to assignment when you have short ITM options in any position.
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Greeks
Delta
The delta of a time spread is determined by where the stock price is relative to the strike price of the options. Depending on where the price of the stock is relative to the strike price of the time spread, the delta of the time spread can go from positive, to neutral, to negative.
When the stock price is equal to the strike price, the deltas of the time spread, whether it's long or short, are pretty neutral. This is due to the fact that the deltas of ATM calls (or puts) are very similar to each other no matter how much time there is until expiration, and are relatively unaffected by volatility. The differences between ATM deltas across expirations are relatively small, and depend largely on the carrying costs.
But as the stock price moves away from the strike price of the options, the deltas of the time spread change very much. No matter if it's a call time spread or put time spread (their P&L profiles are very similar), when the stock price is less than the strike price, a long time spread has positive deltas and a short time spread has negative deltas. When the stock price is greater than the strike price, a long time spread has negative deltas (it wants the stock to come down to its strike price) and a short time spread has positive deltas (it wants the stock to come up away from its strike price). It's interesting to see why the deltas of call and put time spreads are the same. When the stock price is less than the strike price, the calls are OTM and the puts are ITM. Deltas on ITM options get closer to 1.00 the closer the option is to expiration. Deltas on OTM options get closer to 0.00 the closer the option is to expiration. A long OTM call time spread is short a front month OTM call that generates fewer negative deltas than the positive deltas generated by the long back month OTM call. Therefore the long OTM call time spread has positive deltas. A long ITM put time spread is short a front month ITM put that generates more positive deltas than the negative deltas generated by the long back month ITM put. Therefore the long ITM put time spread has positive deltas also.
Gamma
The gamma of a time spread, like its delta, depends on where the stock price is relative to the strike price of the options. When the stock is equal to the strike price, a long time spread has negative gamma. Remember, when the stock price is equal to the strike price the time spread maximizes value. Any movement by the stock away from the strike price will cause the time spread to fall in value. The reason is that negative gamma manufactures positive delta if the stock price falls, and negative delta if the stock price rises – both cause the time spread to theoretically lose value.
The negative gamma is due to the fact that the gamma of an ATM option increases as time goes by. A long ATM time spread, whether it's a call or put, has a short front month option that generates more negative gamma than the positive gamma generated by the long deferred month option. The difference between gamma in the different months is most pronounced for the ATM strike, and diminishes the more OTM or ITM an option becomes until, at a certain point, the deferred month option generates more positive gamma than the negative gamma generated by the front month. That's due to the curvature of gamma. No matter how much time to expiration, gammas for ITM and OTM options are low relative to ATM options. But gammas for ITM or OTM options with more days to expiration are relatively higher than the gammas for ITM or OTM options with fewer days to expiration. And the gamma for ATM options with more days to expiration is relatively lower than the gamma for ATM options with fewer days to expiration. The result is that OTM and ITM time spreads have positive gammas, indicating that they want the stock to move (to their respective strike).
Theta
The theta, or time decay, of a time spread corresponds inversely to its gamma. Theta has the same type of curvature as gamma. But where the gamma of a long time spread is negative, its theta is positive. An ATM time spread wants the stock to stay where it is (equal to the strike price) and for time to pass – that's indicated by the positive theta. When the gamma turns positive for long OTM and ITM time spreads, theta turns negative – if the stock stays where it is, and the time spread continues to be OTM or ITM, the value of the time spread will fall as time passes.
Vega
Just as deferred month options have greater extrinsic value than front month options, they also have greater vega, or sensitivity to changes in volatility. Like gamma and theta, vega is greatest for the ATM time spreads but unlike gamma and theta, vega is greater in the deferred month at every strike price. Because different option expirations can have different implied volatilities, fluctuations in volatilities between the different months can have a large impact on the value of time spreads. Long time spreads have positive vega, meaning if volatility increases, their value increases, and if volatility decreases, their value decreases. To add to the vega issue, if volatility rises in the front month, and either stays the same or falls in the deferred month, a time spread could lose value. That's why if you're contemplating trading time spreads, you should have an idea of how volatility can change from expiration month to expiration month, because this can be a significant source of risk.
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Structure
The relationship between a call time spread and a put time spread at the same strike and in the same months is directly related to the 'jelly roll' spread or simply, the "roll". If your position is a long call time spread, and you sell roll, the resulting position will be a long put time spread. If your position is a long put time spread, and you buy a roll, the resulting position will be a long call time spread. The only difference, then, between a long call time spread and a long put time spread at the same strike is a market-neutral position, the roll.
The interrelationships of the structures of jelly rolls and time spreads are shown in Exhibit–1. The structure of this short jelly roll consists of a long 100 strike call time spread, spread against a short 100 strike put time spread, which is also equivalent to a far month long combo versus the near month short combo. Simply put; a call time spread is synthetically a put time spread because the difference is a jelly roll (two synthetic underlyings against each other).
Exhibit–1
Structure of Short Jelly Roll as it Relates to the Structure of Call and Put Time Spread
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Pricing
A time spread's value is determined by the difference in extrinsic values of the front month option and the deferred month option. (The intrinsic values of the options are the same, therefore, they cancel each other out.) All other things (stock price, strike price, dividends, interest rate, and volatility) being equal, an option with more days to expiration will have more extrinsic value than an option with fewer days to expiration. ATM options, whether they are puts or calls, have more extrinsic value than OTM or ITM options. Therefore, the ratio of extrinsic value between the deferred month and front month (which is the value of the time spread) depends on how close the stock price is to the strike price of the options and the difference between the number of days to expiration for the two options.
The effect of theta on extrinsic value, or how much time decay erodes the extrinsic value of options, is non- linear. That is, the closer an option is to expiration, the greater the effect of time decay on its extrinsic value. Therefore, the ratio of extrinsic value between the deferred month and the front month is also inversely proportional to how close the front month option is to expiration. In practice, an ATM time spread whose front month option is, say 10 days to expiration, will be increasing in value faster than an ATM time spread whose front month option is 90 days to expiration.
The relationship between a call time spread and a put time spread at the same strike and in the same expiration months depends on the roll. Because the value of the roll is basically a function of the carrying costs between the two expiration dates, and because the difference between a call time spread and a put time spread is a roll (as described above), the difference between the call and put time spreads is also a function of carrying costs.
The values of time spreads can be better understood with respect to jelly rolls. Jelly rolls in equities are interesting because the early exercise feature causes put spreads to collapse when cheap calls approach a value that is less than the cost of carry. The differences between the call and put time spread prices as well as the conversion/reversal differences become larger as the strikes increase, and then they start to collapse.
The main thing is that ATM time spreads have the most value because ATM is where they like to be. They get cheaper the farther away from the money that they get. Although call time spreads are synthetically put time spreads via the roll, their pricing and properties differ because of interest rates/dividends and related early exercise valuations.
DIAGONALS
A diagonal can be a confusing position. It has long and short options in two different months (like a time spread) but at two different strikes (like a vertical). Therefore, it is helpful to think of a diagonal in terms of a vertical and a time spread. Perceiving diagonals in this way will help you to understand how you can control the risk and understand the Greeks.
Using a diagonal spread, is simply another way to modify a bull vertical spread or bear vertical spread and for a trader to optimize his or her market objectives based on an analysis of implied volatility levels.
Diagonal back spreads and ratio spreads also attempt to modify the Greeks to better fit the traders' opinion of what will happen in the market. For example, if traders think that volatility is low and they are going to buy a call spread, then they would buy the far month low strike call rather than the close month on a vertical spread in order to add vega sensitivity to their spread. In this case, they will probably also benefit from a positive theta.
Conclusion
Multiple expiration spreads offer the trader a gamut of configurations to choose from. It is recommended to stress-test ratioed time spreads and ratioed diagonal time spreads in the options analyzer to get familiar with their properties. It is these options' relationships that are generally overlooked and thereby have a tendency to become attractive for speculative strategies.
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9 de 19
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Modifié le 07/10/2007 20:22
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To learn : http://www.888options.com/default.jsp
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10 de 19
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Modifié le 07/10/2007 20:38
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to read : http://wallstreetspeak.com/
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11 de 19
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Modifié le 07/10/2007 22:18
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Ressource : http://www.eioba.com/a11670/option_trading_tips_covered_call_cashflow
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12 de 19
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Modifié le 09/10/2007 16:05
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Source : http://www.freerepublic.com/focus/news/855968/posts
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=================== EXTRACT ==================
When TSHTF one thing is for sure-- no one will be able to say they weren't warned.
12 posted on 03/03/2003 2:39:25 PM PST by headsonpikes
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To: justshutupandtakeit
"Utilizing covered call writing is a great benefit to a portfolio. This is a riskless activity and actually protects against price declines."
That's not what the article is addressing or, at least, limited to. Covered call writing has been around forever. Fifty non-financial corp's like IBM each doing a $300million interest rate swap with a big broker dealer is the problem. If those swaps mature in say six or seven years, well, you know what they say: 'that put can break 6,7,8 times before it ever gets to the hole.
13 posted on 03/03/2003 2:59:16 PM PST by groanup
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To: justshutupandtakeit
Utilizing covered call writing is a great benefit to a portfolio. This is a riskless activity and actually protects against price declines. In addition, using put writing when one has already decided to buy a stock is very valuable.
He isn't talking about CBOE positions but rather 110 trillion of illiquid sewage. Don't worry Bush just appointed a Neo-Keynesian as his economic advisor. I'm sure we can inflate our way out of 10+ GDP's of contagion.
14 posted on 03/03/2003 3:49:25 PM PST by AdamSelene235 (Like all the jolly good fellows, I drink my whiskey clear.)
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To: William Creel
If one of the most successful investors in history is also confused, that should definitely be a red flag to most other investors.
15 posted on 03/03/2003 6:44:38 PM PST by Stefan Stackhouse
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To: Stefan Stackhouse
qualification here - it should be a red flag to investors who are as good as Warren Buffett. he is effective enough in his investing strategy that he has no real need to hedge; remember he's one who's also of the practice to only invest in a very select few set of companies, himself, but advises the average investor is still well advised to more thoroughly diversify. the same thing applies at the higher level - Berkshire Hathaway has been very profitable with insurance and other investments largely due to his insight, methods and practice. how many Buffetts do you think AIG, C or the others have in their top echelon? 1, 2, maybe even zero? thus those other entities seek to balance their exposures anywhere, anytime, through hedging techniques and alternatives. again, these are not recommended or probably even necessary for the amateur or individual investor. but, note, interestingly enough, the folks repeatedly posting this article and its derivatives (pun intended) are the goldbugs and their disciples who've been reluctant to post Puplava or their other doom & gloomers, given the inevitable plunge in gold prices over the past couple weeks and no mention of John Bollinger's warnings over the same period that gold was primed for a collapse of $100 with the war pending and the possibility for even more losses in more accelerated fashion should the war go well and quickly for the USA.
16 posted on 03/03/2003 7:21:47 PM PST by Steven W.
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To: headsonpikes
Espicially Congress. Frank Partnoy, Professor of Law/ University of San Diego School of Law, submited testimony to the Committee on Governmental Affairs on January 24, 2002 during the Enron hearings. Here are a couple of paragraphs from his testimony:
"Derivatives based on credit ratings – called “credit derivatives” – are a booming business and they raise serious systemic concerns. The rating agencies seem to know this. Even Moody’s appears worried, and recently asked several securities firms for more detail about their dealings in these instruments. It is particularly chilling that not even Moody’s – the most sophisticated of the three credit rating agencies – knows much about these derivatives deals."
"If Enron had been making money in what it represented as its core businesses, and had used derivatives simply to “dress up” its financial statements, this Committee would not be meeting here today. Even after Enron restated its financial statements on November 8, 2001, it could have clarified its accounting treatment, consolidated its debts, and assured the various analysts that it was a viable entity."
17 posted on 03/03/2003 7:22:24 PM PST by mrweb
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To: mrweb
Bad things a-coming:
Will Clinton be remembered as Herbert Hover??
Will Bush be the next FDR (anti-FDR) and finally unravel the mess that began with the first Great Depression??
Everything is circular, and perhaps now that socialism is dying everywhere in the world it is time that it whimpers out for good.
18 posted on 03/03/2003 10:09:54 PM PST by Porterville (Screw the grammar, full posting ahead.)
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To: AdamSelene235
Why persist with the erroneous statement that Keynes was an inflationist? He wasn't. Keynesianism as practiced today is not what he had recommended. Have you ever read the General Theory of employment, interest and money? Or do you rely on mistatements of others ideas?
Keynes certainly had nothing to do with the creation of financial derivatives. Nor does his theoretic framework have a means of handling them.
19 posted on 03/04/2003 10:00:47 AM PST by justshutupandtakeit ( Its time to trap some RATS)
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To: justshutupandtakeit
Why persist with the erroneous statement that Keynes was an inflationist? He wasn't.
In theory, he wasn't, but in practice this is the result of Keynesianism. This is no mistake. Keynes despised Western civilization but hid this contempt behind a facade of altruism just as he hid his habit of raping children behind the facade of his heterosexual marriage. He knew that socialism could be used to destroy Great Britian.
Keynesianism make Socialism economically viable by preserving private ownership while allowing for central planning and control. This combination of private profit with socialized risk is precisely what leads to the problems emerging in our banks, GSEs, agricultural markets, health care markets, etc, etc.
20 posted on 03/04/2003 10:12:52 AM PST by AdamSelene235 (Like all the jolly good fellows, I drink my whiskey clear.)
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To: Steven W.
Buffett (and the gold bugs) are not the only ones concerned about derivatives:
Risk rises at European regional banks
By Jenny Wiggins in New York
Published: March 9 2003 20:41 | Last Updated: March 9 2003 20:41
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1045511461181&p=1012571727088
European regional banks have taken on a lot more risk than their public accounts show because of heavy exposure to credit derivatives, according to new research.
Three-quarters of the European banks surveyed in a report by Fitch, the credit rating agency, have sold about €50bn of credit protection to other parties.
Half of these banks were German, with the state-owned Landesbanken being particularly active.
They have increased their exposure to high-yielding derivatives to offset flagging profits in traditional lending businesses. Fitch says it may cut the credit rating on banks with large exposures to credit derivatives.
The Fitch report follows last week's warning from Warren Buffett, the influential US investor, that derivatives represented "financial weapons of mass destruction" and are "potentially lethal" to the economic system.
Fitch said the European banks' exposure to credit derivatives was surprising because banks typically buy credit protection to reduce risk. Institutions that sell protection on a bond or loan using a credit derivative assume the underlying credit risk of the security.
Although European banks are net buyers of protection, with about €65bn purchased, the bulk of the buying has been undertaken by a few large institutions. Only 30 per cent of European banks active in the credit derivatives market are protection buyers.
Fitch has spent three months trying to quantify financial institutions' exposure to credit derivatives but has been only partially successful. Some institutions have refused to disclose information about their derivative activities.
"We need more financial transparency," said Roger Merritt, Fitch analyst and co-author of the report, to be released today.
Fitch plans to meet with global regulators to encourage more disclosure of credit derivatives activity.
21 posted on 03/09/2003 7:07:14 PM PST by mrweb
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To: justshutupandtakeit; m1911
Utilizing covered call writing is a great benefit to a portfolio. This is a riskless activity and actually protects against price declines.
I wouldn't call it risk less. A star in your portfolio could be assigned.
I buy stocks specifically to sell call contracts (usually at/near or in-the-money) with the intent of them being assigned, and can typically make 5% in 30-45 days with 10+% downside protection. If they drop too much below the strike price before expiration I may have to buy back the option liability before selling the stock at a loss. Admittedly not much of a loss, and in some cases I sell the stock and hold the options contracts naked, letting them expire worthless, and come out ahead. But it is a great way to make a living! Put and Call credit/debit spreads and the like can be even more lucrative.
22 posted on 03/06/2004 6:08:22 PM PST by CapandBall
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To: CapandBall
I view covered calls as a means of reducing the risk of holding stocks at a minimum and as a positive means of earning income through the premium. My return, not counting capital gains, is between 15-20% and I also do not buy stocks to hold specifically. But don't mind keeping them if they generate consistently good option premium income.
I don't understand your reference to "a star in my portfolio." When I am doing this on my own account I do as you mention but for the portfolio I manage for my church do not because of the unlimited risk or even the slight increase in risk which those strategies impose.
I have been using selling puts as a means of purchase of
stocks you want to buy or just get the premium if it expires.
23 posted on 03/07/2004 1:20:38 PM PST by justshutupandtakeit (America's Enemies foreign and domestic agree: Bush must be destroyed.)
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To: justshutupandtakeit
I may be misunderstanding your strategy, but when I said you may lose a star in you portfolio, I meant that if you write call options on a stock you hold (covered calls), if the price of the stock goes above the strike price, it will be assigned (your broker will sell the stock at the strike price) when the option expires. Of course, you could always buy the option back before that happens.
You have freep mail.
24 posted on 03/07/2004 4:18:05 PM PST by CapandBall
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To: CapandBall
Oh, I know that and rarely chase an option unless I can push it forward at a sufficiently large profit on the buy back sale. My experience has been that purchasing back the option to keep the stock has generally not been justified by future stock price movements. And eventually it drops back below the strike price at which I sold the contract.
25 posted on 03/07/2004 4:53:49 PM PST by justshutupandtakeit (America's Enemies foreign and domestic agree: Bush must be destroyed.)
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To: Porterville
That's a poetic balance, and hopeful for so being. Yet who is Dubya's apprentice for a third and fourth ferm?
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13 de 19
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10/10/2007 19:32
artes
Messages postés: 1509 -
Membre depuis: 15/12/2006
Choix du sous-jacent : http://finance.yahoo.com/etf
&
http://finance.yahoo.com/etf/browser/tv
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http://i22.tinypic.com/2054dnb.jpg
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14 de 19
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11/10/2007 08:37
artes
Messages postés: 1509 -
Membre depuis: 15/12/2006
http://i20.tinypic.com/mj0keq.jpg
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Choix du sous-jacent : http://finance.yahoo.com/etf
&
http://finance.yahoo.com/etf/browser/tv
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http://i20.tinypic.com/mj0keq.jpg
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15 de 19
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Modifié le 13/10/2007 23:26
artes
Messages postés: 1509 -
Membre depuis: 15/12/2006
LEAPS
http://www.google.com/search?hl=fr&q=define%3A+LEAPS&btnG=Rechercher&lr=
Leaps:
Long-term Equity Anticipation Securities, which are options with maturities longer* than one year.
*(ndla "near of one year" or longer than...)
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16 de 19
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Modifié le 18/10/2007 00:49
artes
Messages postés: 1509 -
Membre depuis: 15/12/2006
la raison pour laquelle on vend les options
==============================================
JC: Overall buying options sounds like a good strategy, if you’re able to get all of
the criteria down. What are the risks?
WC: Buying options is inherently risky. When I was a broker, many years ago, we felt
buying options was a great way to control losses, but not build accounts. In any given
month, 70% – 90% of all options expire worthless. With such large percentage expiring
worthless, buying options can definitely be risky. Once premiums are paid, they are gone.
If you missed the mark on that position, your account takes a hit. No matter how big an
account may be, it can only take so many hits before being depleted.
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src : http://www.cftitrading.com/download/buyandsell.pdf
(à voir en pratique, STO = sell to open)
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17 de 19
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25/10/2007 13:17
artes
Messages postés: 1509 -
Membre depuis: 15/12/2006
> http://www.google.com/search?source=ig&hl=fr&rlz=&q=options+volume+dia+iwm+qqqq&btnG=Recherche+Google&meta=
click
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18 de 19
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02/11/2007 13:32
artes
Messages postés: 1509 -
Membre depuis: 15/12/2006
Une application pratique du DIAGONAL SPREAD se trouve à cette adresse,
valable pour actions, indice, GOLD , Volatilité / etc...
cliquer ici
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19 de 19
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Modifié le 14/11/2007 13:16
artes
Messages postés: 1509 -
Membre depuis: 15/12/2006
Un exemple pratique basé sur des exécutions virtuelles avec un réel "data feed"
à cette adresse (Cliquer Ici)
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19 Réponses
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Messages à suivre: (19)
Dernier Message: 14/Nov/2007 12h16
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qqes liens de référence:
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