Replies to post #759 on The Options Box (OBOX)

[bbgold]

Morning Bernard,
I have never held any Leaps long term. The Jan 03 and 04 2.50 Leaps I had on Q last year would have worked out well had I held them longer, sold when Q was near $3. OU and I were talking about last year and how it would have been possible to buy some Index or Stock Put Leaps and have just taken the year off. I am just playing around a little with that idea this year and seeing how some Leaps perform during the year as a Straddle play. Still Best to have just one trade that is in line with the market direction though. Will need to work on how long to carry the Straddle before exiting one side of the trade to maximize the profits. Most of the time using the Plan Long Calls signal or Short Puts signals will work. Except for lately when the markets cannot make up their mind as to a direction <GG> :^)

[bbgold]

UBS Jan 04 Leaps update:
I should have checked this last week but have been lazy lately. Currently the UBS Jan 04 $50 Puts are trading at 11.60 x 12.00 and the Calls at 1.35 x 1.60. The Calls really had a large depreciation but still have our total account near $13. Using the movement of the DJX as our leading indicator might have had us closing out the Call side of the trade when the markets moved below SMA Support and left us profiting on the Puts, maybe. That is the hard part of trading a Straddle, deciding if you should exit one side of the trade to capitalize on the other side. It would be hard to exit one side of the trade here as we could still have further downside but a reversal is quite possible to bring the Calls positive. Just putting up some speculation and we will have to continue to watch the charts to see if we can determine good triggers for exiting one side of the trade to capture the most profits. IMO a Straddle is a trade to be made when the Market or Stock direction is uncertain and it is sitting at a turning point, as UBS was near $50. Having the Straddle allows you to be positioned for a move in either direction but I am still not sure which trigger would be best for exiting one side of the trade. Hopefully the charts will reveal a good pattern to follow :^)
So far it looks as though exiting any Calls on any move back to SMA resistance and adding them back as a hedge to the Puts near the lows would have made for the best trades.
Jan 05 $40 Puts at 6.60 x 7.30 Jan 05 $60 Calls at 1.10 x 1.50
Is anyone approved to Sell Naked Options? Looks like maybe time to either sell or hedge the Puts again.