Naked Options Selling! - Page 3
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Thread: Naked Options Selling!

  1. #21
    Sold short GBP/JPY place, hit 244.78, expiry July 2nd, 2007 for 34 pips.

    The previous option expired worthless. Although the calendar is somewhat more busy this week, I am still anticipating that the carry pairs to keep on as normal (buy on dips, range a bit, and/or split new highs). There's no sign of a change on the immediate horizon. Factoring in the extra risk with selling a place at those levels, I have reduced my position size by 20% in the last level. Tuesday, Wednesday, and Thursday should be intriguing for JPY pairs. Retail sales, industrial production, and inflation data are defined to be published.

  2. #22
    ragingbull,

    Thanks so much for sharing. I'm still going through this. It is very helpful. It looks as if you're doing Calendar spreads (good egy).

    The broker that I use for alternatives quotes every thing in dollars rather than Pips.


    Frank

  3. #23
    Quote Originally Posted by ;
    Sold short GBP/JPY place, strike 244.78, expiry July 2nd, 2007 for 34 pips.

    The prior option expired worthless. Although the calendar is a bit more active this week, I'm still anticipating that the carry pairs to keep as regular (buy on dips, range a bit, and/or break new highs). There is not any indiion of a change on the horizon. Factoring in the added risk with selling a place at these levels, I've reduced my position size by 20 percent in the last degree. Tuesday, Wednesday, and Thursday ought to be intriguing for JPY pairs. Retail sales, industrial production, and inflation data have been set to be released.
    Hi

    On which platform and broker would you trade these options, are they options on the money or on the stocks?

  4. #24
    Quote Originally Posted by ;
    ragingbull,

    Thanks so much for sharing. I'm still going through this. It's very helpful. It seems like you're doing Calendar spreads (great egy).

    The broker that I use for alternatives quotes every thing in dollars instead of Pips.


    Frank
    No problem, any time! In fact, no... I will not be doing any calendar spreads unless the unwinding is confirmed. I am in a position to observe the option quotes in both* dollars and pips. Maybe there's a specific perspective you need to modify? I have not utilized IKON's Core Options Client in some time (but I will be soon ), so that I don't remember how they quote...

    Quote Originally Posted by ;
    Hello

    On which platform and broker do you exchange these options, are they options on the cash or about the futures?
    Hi Howard. Thank you for your query. I use Synthesis Bank's Trading Floor platform to exchange. I'll Be using IKON Global Markets' Core Options Client in the near future. No... I am not shing brokers... I will be using them concurrently.

  5. #25
    Hi Howard. Thanks for your question. I use Synthesis Bank's Trading Floor platform to trade. I'll Be using IKON Global Markets' Core Options Client in the Not Too Distant Future. No... I am not shing brokers... I will be using them simultaneously. [/quote]

    Thanks a lot

  6. #26
    Today was a terrible day... not only did the pair go beyond the strike, I also got stopped out on my own Dollar.

  7. #27
    Well, it is the time of the month. Time to tally up the total pips and percent gain in the account. Today makes just two weeks since I have embarked on this egy. My account is up 26.1%. Total accumulated pips is 111.

    My account had been shellacked last week when GBP/JPY went contrary to my place after which whipsawed. The Dollar worked as planned limiting my losses, however, the alternative still expired worthless today anyway.

    Sold short GBP/JPY put, strike 243.85, expiry July 9th, 2007 to get 33 pips.
    Sold short NZD/JPY call, strike 96.73, expiry July 9th, 2007 to get 14 pips.

    Bullish about the GBP, bearish on NZD, neutral on JPY. Hence the positioning. The entire place size (despite having sold 2 choices rather than one) is 20% less than the former position... chalk it up to greater risk aversion.

  8. #28
    FAQ's:

    What broker do you use to market options?
    Ans: Currently Synthesis Bank. I'm going to learn in a couple of days as to whether I will be trading using IKON Global in addition to Synthesis. Any modifiions will be posted here.

    Where do I find more info on options as they relate to FX?
    Ans: http://learning.saxobank.com/forex/options/Default.aspx

    What are you doing?
    AnsI sell a choice based on how I think that a currency is going to move. Neutral-bearish, I sell a call... neutral-bullish, I sell a put.

    Why?
    Ans: I am willing to accept potentially unlimited losses (and restricted profits ), in exchange for a high probability trade.

    Endless losses?! Are you insane?
    Ans: Yes. :

    how can you hedge?
    Ans: I pay the *entire* place with a place position. One astute poster pointed out in a fast moving market (or worse( a gap), a fill may not be possible. In cases like this, I'd buy an option with a strike price lower or higher (depending on whether it is a call or put respectively) in order to stop additional losses.

    Max drawdown up to Now?
    Ans: Approximately 3.7%.

  9. #29
    Extended NZD/JPY at the strike, call option still open... GBP/JPY place deep OTM.

    *edit* Stopped out on the NZD/JPY Dollar... drawdown larger than expected. Upgrades.

  10. #30
    Now was a repeat performance of June 27th. Pair goes beyond attack, option becomes hedged, pair quickly yells, stops out hedge... this time with Kiwi/Yen.

    According to my calculations, this brings the maximum drawdown to 8.4 percent... assuming the pair stays beneath the attack until expiration. I will be watching the Sunday open for any signs of difficulty.

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