2011 good option trade: GE - 未名空间MITBBS历史存档

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2011 good option trade: GE

2011 good option trade: GE# Stock

z*g2010-12-28 08:12

1 楼

GE is in a good position to move higher in 2012.
I am not an ambitions option trader and I am relatively new here.
Here is my contributions:
Type: spread
GE
Buy $17.5 Jan 2012 call at $2.2
Sell: $20 call Jan 2012 at $1.1
Cost: $1.1
Get even when GE is at $18.6 at Jan.2012
When GE ends up higher than $20. Profit is higher than 100%.
Follow up strategy
Exit point: When GE touch $20 you can choose to exit;
When GE fall down to $17 you can choose to buy back the $20 call Jan 2012
and then sell the call again when GE moves higher than $19 o so.

m*02010-12-28 08:12

2 楼

my two cents
since it's leap.
if it reaches 20 before 2012,
this spread will worth less than 2.5
besides, VIX is historically low,
GE's IV is also very low in one year's basis.
the spread will worth even less.

【在 z******g 的大作中提到】

: GE is in a good position to move higher in 2012.
: I am not an ambitions option trader and I am relatively new here.
: Here is my contributions:
: Type: spread
: GE
: Buy $17.5 Jan 2012 call at $2.2
: Sell: $20 call Jan 2012 at $1.1
: Cost: $1.1
: Get even when GE is at $18.6 at Jan.2012
: When GE ends up higher than $20. Profit is higher than 100%.

z*g2010-12-28 08:12

3 楼

If GE reach $20 in 3 months, it does not worth $2.5, and say it worth $2,
you also made a huge percentage gain in 3 months and you can search for
other oppotunity.
Here looking for a big change in price is more important than for the IV s.
Agree that VIX is low at this moment, so I am also trying to search for some
stangles.

【在 m********0 的大作中提到】

: my two cents
: since it's leap.
: if it reaches 20 before 2012,
: this spread will worth less than 2.5
: besides, VIX is historically low,
: GE's IV is also very low in one year's basis.
: the spread will worth even less.

q*x2010-12-28 08:12

4 楼

good disussion

m*02010-12-28 08:12

5 楼

you are way too optimistic,
it GE is $20 in 3 months, if IV keeps as low as now.
the profit is about 0.38-0.40 with 1.1 investment.
far less than what you imagine.
Spot 03/28/11
19.50 27.25
19.56 28.55
19.62 29.84
19.68 31.13
19.74 32.42
19.79 33.70
19.85 34.98
19.91 36.24
19.97 37.51
20.03 38.77
20.09 40.03
20.15 41.27
20.21 42.51
20.26 43.75
20.32 44.98
20.38 46.20
20.44 47.41
20.50 48.62

.
some

【在 z******g 的大作中提到】

: If GE reach $20 in 3 months, it does not worth $2.5, and say it worth $2,
: you also made a huge percentage gain in 3 months and you can search for
: other oppotunity.
: Here looking for a big change in price is more important than for the IV s.
: Agree that VIX is low at this moment, so I am also trying to search for some
: stangles.

I*n2010-12-28 08:12

6 楼

stock market is near 2007 high le... how do you know it won't range for a
year?

【在 z******g 的大作中提到】

I*n2010-12-28 08:12

7 楼

plus these leaps have thin volumes, bid/ask spread can take away 10-15%
easily.

【在 m********0 的大作中提到】

: you are way too optimistic,
: it GE is $20 in 3 months, if IV keeps as low as now.
: the profit is about 0.38-0.40 with 1.1 investment.
: far less than what you imagine.
: Spot 03/28/11
: 19.50 27.25
: 19.56 28.55
: 19.62 29.84
: 19.68 31.13
: 19.74 32.42

m*02010-12-28 08:12

8 楼

Today, IV is about
GE US 01/21/12 C17.5 Equity - 27.7624
GE US 01/21/12 C20 Equity - 26.1263
the average IV for both in 281 trading days are:
GE US 01/21/12 C17.5 Equity - 33.02167544
GE US 01/21/12 C20 Equity - 31.71674804
using these two IVs:
the spread after three months when GE = 20.00 is
about 0.28 profit.
19.80 25.13
19.82 25.52
19.85 25.91
19.87 26.29
19.89 26.68
19.92 27.07
19.94 27.45
19.96 27.84
19.99 28.23
20.01 28.61
20.04 29.00
20.06 29.38
20.08 29.77
20.11 30.15
20.13 30.54
20.15 30.92
20.18 31.30
20.20 31.68
considering bid/ask spread is wider for leaps,
I will say, most likely you can only expect 20% profit
if it happens as you expected.

m*02010-12-28 08:12

9 楼

of course. that's why I traded SPY weekly a lot.
1 cent spread.

【在 I********n 的大作中提到】

: plus these leaps have thin volumes, bid/ask spread can take away 10-15%
: easily.