so this means, u didn't have to do SOX 404 work. they didn't introduce that until AFTER the enron, worldcom, etc debacles.
and u prob did ur cpa exam on paper, right?? whereas i did the computerized one, lol.
omg, really cheetah? i'm a cpa too! i used to work for ernst & young (the firm that audits scty) & i have LOTS of friends at PwC (price waterhouse). AND i know a girl that works at CBIZ! wow, this is amazing. u got ur start in 1968?! i started at EY in 2009! i feel like a baby, lol.
i left auditing & the public accounting world becuz of the VERY long hours & travel. my husband felt i was away too much so after 4 busy seasons, i left & have been trading since then. and i agree, this is WAY more fun! lol
well this is great!! nice to meet u, cheetah!
hey cheetah, i just checked the options first platform & under tools, there is a model u can use for the calculation. it's called "probability calculator". it shows 1, 2 & 3 std deviations. also shows probability of price ending up above, below or in between ur tgt prices. try this instead of calculating urself.
lol, ok here goes:
share price x iv x sq root of (# of days til exp / 365). so in YOUR trade:
70.97 x .60 x sq root of (3/365). the ans = +/- 3.86
so 1 std deviation is between $67.11 & $74.83
2 std deviations is b/w $63.25 & $78.69, etc.
i think there are models online (not sure if the trading platform has one) that calculate this for u. i'm an accountant so i like to do calculations myself rather than trust the models.
well remember the 60 puts last monday? it turned out to be a hedge.
so i'm questioning this week's put activity also as it's a short week.
4 week ma is near that lvl though.
hi sg! yes i saw ur post AND responded. my post is in that thread, but it doesn't look like yhoo updated it yet. they suck, girl. lol
i also read m.moc's thread.
no prob, cheetah. ur welcome.
when we initially discussed this trade, i mentioned i do it only on the rut or spx although stocks can be used as well. here are my guidelines for doing this trade on a stock:
- low volatility
- stock price above 125
let me explain why i use those guidelines (specifically the 1st one). i'll use ur scty trade vs my rut trade for comparison.
scty volatility = 50-60ish = price moves a lot
rut volatility = 15-25ish = price moves a little
since this is a neutral strategy, u don't want a lot of movement & high volatility stocks are subject to large price swings. i'm not saying that will happen with scty this week as it's a short week, BUT please be prepared to swiftly adjust ur trade should it move against u.
some stats on scty & ur trade:
- ur currently about 1 std deviation away from current trade lvl
- options imply roughly a 4% move for the week
- 4 week ma for scty this week is in the 65-66 area (currently)
thnx sg, going to read this now. as expected, vol is low & will likely stay that way for the rest of this short holiday wk.
cheetah, by the time u read my msg delta will have changed as it's dynamic.
if u feel more comfortable selling a lower delta, by all means do so. u'll get a smaller credit, but u'll feel more comfortable while in the trade.
another suggestion is to use options first's virtual trading platform a couple times to get a feel for the trade & how it plays out.
i'm here til mkt close. if i don't answer right away it's cuz i'm in the middle of a trade. happy trading today!
ok so right now, rut's at 1188ish.
.094 on the CALL side puts the strike at 1210, and
.099 on the PUT side puts it at 1155
so if i were putting on the trade right now (which i'm not), i'd:
morning cheetah, read my post again my friend. i said .08 NOT .80 as ur correct, .80 would put us deep ITM. we want OTM which is a .08 delta or i just call it an 8 delta. mkts abt to open so i'll see what strike has that delta and then post it for u.
lol, it's ok cheetah. I answered ur question in the other thread, but yes.....we'll finish up on Monday. u have a nice weekend too!
oh that's one of the platforms I use as well. hey listen, if ur a daytrader/heavy trader, u should talk to them about giving u a better commission rate. I noticed u paid 700+ on ur scty trade, I would've paid about half that w/ options first.
ok for the delta, it's .08 (OTM) & yes ur correct the higher side UNLESS of course say a .078 is still getting u a nice net credit.
2 other things:
- I like to enter the trade all at once, but if it's taking too long I leg in
- I ALWAYS exit the trade when it hits my tgt (my tgt is 70-80% of premium recvd)
so on Monday morning, I put the trade on. by Thursday afternoon, i'm out (rut settles on Friday mornings). sometimes i'm out on Wednesday or even Tuesday if my tgt is reached. my goal isn't to get every last penny as this is a trade i do every week anyway.
btw, not sure how familiar u are w/ options jargon. what I mean by short strike is the strike u sell. the long strike is the one u buy. and I think I mentioned I do a 10pt spread so that would be the distance between ur short & long strikes. i.e. 1195/1205, etc.
hi cheetah, sg told me I had a msg from u. sorry I missed it before I left, i'm usually gone right at mkt close.
standard deviation is a statistical calculation using implied volatility. it helps determine range. so statistically speaking, a stock or index will trade WITHIN roughly 2 std deviations about 90% of the time. so with that knowledge, i keep my short strikes at roughly that distance from current trade lvl. it's a pretty simple calculation, but those that don't use it can find it tedious.
what i'd rather have u do is use delta to pick the short strikes as it's much easier. so next week, or if u'd like u can do this right after reading this msg, ur going to look at the options chain & look for an 8 delta or one that's close to 8. THAT'S going to be ur short strike.
"petunia in an onion patch".....hehehe, ur a funny one cheetah.
that brd she's referring to is diseased, truly a sick place. i've told her many times to just stay away from there. it's terrible!
it's yhoo, bob. they're terrible. they need to update their technology. sg couldn't even post earlier.