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I want to buy options on the FTSE

Last post 22 Oct 2008, 7:51 PM by Zulu. 10 replies.
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  •  16 Oct 2008, 12:35 PM 605255 in reply to 130082

    Re: I want to buy options on the FTSE

    Hi!

    If you still having problem then you may contact to me. I think I can help you as I have PDF format. Could you please give me your email ID then I will send you the details.

     

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  •  22 Oct 2008, 1:07 PM 609429 in reply to 592509

    Re: I want to buy options on the FTSE

    I have a book by David Caplan, "The New Option Secret", 1996, but very relevant. Lots on volatility. ISBN 1-883272-33-5. I bought it s/h of Amazon from the US recently.

    I have used Interactive Brokers, but you need $10000 to open an account. You can withdraw most of the funds after opening. I like being able to place limit orders myself. Prices move very quickly, and I can't imagine trading without real time info.

    I would advise you to watch the implied volatility of any stuff you are buying. Some is around 100% and above right now. Normally 30% would be high. If buying high vol options you can find that when the markets go quiet, even if you got the direction correct, you can still loose, even thoug you have lots of time value left. The price of out of the money calls went up even as markets fell, moving further away. The problem with writing naked options at times like this, is that the Vol goes higher still, and you are left with massive margin calls. The out of the money calls have their prices marked up too. In the money calls are too expensive to get good leverage.

    I am reading the book and sitting it out until things go quiet.

     

  •  22 Oct 2008, 7:51 PM 609896 in reply to 609429

    Re: I want to buy options on the FTSE

    The problem with writing naked options at times like this, is that the Vol goes higher still, and you are left with massive margin calls. The out of the money calls have their prices marked up too. In the money calls are too expensive to get good leverage.

    I am reading the book and sitting it out until things go quiet.

    One of the things caplan stresses is the ability to roll options away and out from the spot price if hit,this means having extra available capital if needed to add contracts,its a mistake to trade to close to your margin limit although it does make your returns look pretty good (for a while)

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