% | $
Quotes you view appear here for quick access.

American Capital Agency Corp. Message Board

  • arshakandriasov arshakandriasov Jan 23, 2012 11:50 AM Flag


    Bought em, 1/3 of the position I want to spend. Mar 30 ones, 50 of them. They speak to me, do they speak to you? :) good luck, and the EVEP boys, continue to kick butt

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • bought the march 30 puts ? Are you bearish or did you sell them ?

    • Being assigned on a naked short put, or on a bear put spread, is not the "realization" of any risk. After assignment you continue to have the exact same risk as before, only now you have more upside (if PPS goes up). So your position gets better.

      This is not an opinion, it's a factual statement. Sorry you don't see this and you are still dancing around it with untruths.

    • >>If anyone has a non-pathological counterexample, I'd be glad to see it>>

      You know even though YBF has me on ignore it is truly quintessential irony that after all of the specific examples I and others gave YBF, the very thing he seeks, he rants on about pathology...pretty sick puppy....

    • yourbestfriendintheworld yourbestfriendintheworld Jan 31, 2012 9:27 AM Flag

      Bigger picture: Shorting a Put in a bearish market is a risk enhancement, not a risk reduction. Being assigned that Put at a lower price is a realization of the enhanced risk. Not a hedge. Not ever. I wish I'd just said that from the outset instead of playing ceteris paribus. People are all confused now by the superposition of options and the nuances of delta and theta and the distribution of probabilities and the psychology of momentum investing. None of that enters into it.

      Being assigned is the opposite of what you want, because it's less profit than if the option expires worthless.

      If anyone has a non-pathological counterexample, I'd be glad to see it, but not on this thread. Yahoo is presenting it like it's a pile of socks tumbling in a dryer.

    • The reason I have pressed on with this is that I think YBF is a very smart person (let's disagree on this) and I enjoy reading his comments. And it's very disconcerting to be in disagreement about factual matters with someone who you think is smart.

      BTW I think that part of the reason for these disagreements may be that the options literature is full of references to "risk of assignment" for positions that have short legs. This "risk" usually refers to situations where there is not enough margin to deal with an assignment, and in such cases the outcome depends a lot on individual brokers' policies. Some brokers go as far as closing down your account if you are assigned and don't have the required margin for the assignment. Even in the case of a spread, one has to check with their broker if they will automatically exercise the long leg if the short leg is assigned. (This may or may not be desirable).

      Everything I say (and that applies to you as well I believe) assumes that there is enough margin to buy or short assigned shares. I think I have clarified this several times in this conversation.

    • >>it should be fun and maybe useful...>>

      I love spreads, and I am happy and tolerant of all posters when their posts are offered in the spirit you describe.

      We have such a great group here, unlike ANY message board I have ever read.

      I am trying to convey some strategies on spreads that I feel are of benefit, free, and filled with real time examples of placing trades, adjustments, losses and wins, and risk management.

      Learning the simple Long option, followed by the Short option , followed by the Spread or the using of both of the former to create the latter is a complex option strategy.

      It is the next step in a clearer understanding of options. It is difficult enough learning this option technique, but when an individual panders arguments counter to what is factual it is very unfortunate. The specious nature of his challenge is simply irksome. The confusion to those learning is my concern.

      It should be obvious after 100 posts that YBF chooses to be "right" at all costs, even faced with a plurality of examples showing his errors. Yet YBF, who openly stated he is not that familiar with trading spreads chooses to challenge Ephort and myself on the concept of assignment regarding*** A SPREAD***.

      I believe he said I am on ignore, which is fine. Here is an individual who is very smart, but is trapped in his world of always having to be right.

      For those learning, do not listen to his arguments for assignment. He confuses single short option assignment with multiple legged assignment on spreads.

      Ephort has been gracious with him, I have not. I have no use for him...he is simply unteachable...and therefore Ephort ###not useful### as you graciously suggested at the top of this page...

    • Well fishermen talk about how to catch fish and hunters talk about how to shoot game...

      What do you expect of option junkies?

      As long as it's done in a good spirit it should be fun and maybe useful...

    • dderringer311 Jan 30, 2012 10:28 PM Flag

      Yeah, never seen a 100 post thread before. The one thing I am very happy about is that a thread called "Puts" has no one bashing nor anyone upset about a bear opinion. I think that says a lot about the quality of people on here, I don't think any other yahoo board could manage that. For the record, I am still bullish longterm.

    • Congrats Ephort,

      You were the 100th post on this thread. When was the last time we had a 100 post thread? Thanks DD for driving us all down the rabbit hole. All the normal participants were there.

      I can't decide if YBF takes the award for the Hatter or the March hare. I like the Hatter, since it warms me thinking of the Queen of Hearts yelling, "Off with his head!".

    • By the way, your naked short put example is wrong too. If the stock drops 40 cents below strike, you will be losing the same 40 cents whether you were assigned or not. No difference.

      In fact, if that short put still has time value in it (delta < 1) then the assignment will make your loss smaller.

      So there is a loss in that scenario, but the assignment can only make things better, here as well.

    • View More Messages
18.89+0.01(+0.05%)May 31 4:00 PMEDT