HSX Forum

Playing & Trading Strategy

Here is my .02 I will use a fictional MOVIE with a strike of 20 which means

Posted by: StarBondFund on Dec 15, 09:16 in response to Flash's post That is true...

that if you buy the call at 2, you are hoping it makes more than 22.  If you buy the Put at 2 (IPO) you are hoping that it will make less than 18.  (ignoring the commission)

If you short the call, you are hoping it makes less than 20 and if you short the Put, you are hoping it makes more than 20.

These are not mutually exclusive events.  A win on the purchase of a call, also is a win on the short of the put, since greater than 22 is also greater than 20.  A win on the purchase of a Put, is also a win on the short of the Call, since less than 18 is also less than 20.

Generally, if you think that MOVIE will do better than the strike, and you can afford the action, you long (buy ) Call and short the Put.   If you think that MOVIE will do Less than the strike, you buy the Put and short the Call.

In virtually every pairing, one of them delists at zero, and the other is greater than zero, and hopefully, greater than 2.  The trick is to guess the zero and be doing it correctly more often than incorrectly.

NOTE  Occasionally, the movie delists within 2 of the strike price, and you lose on both the put and the call.  You could short them both, but that is REALLY risky, unless it is a strike of 5.

 





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The Odyssey $465M Blockbuster Wa (ODYSE.BW) 20000 19.78 (+0.05)          Verity H$25 Call (VERTY.CA) 25000 2.00 (0.00)          Digger (DIGER) 100000 76.22 (-1.84)          Everest: The Other Side (EVTOS) 150000 2.00 (0.00)          Forgotten Island (FRGIS) 100000 51.77 (+0.30)          Verity H$25 Put (VERTY.PU) 25000 2.00 (0.00)          Verity H$25 Call (VERTY.CA) 25000 2.00 (0.00)          Verity - Opening Weekend (VERTY.OW) 100000 25.00 (0.00)          The Resurrection of the Christ (RESUR) 26741 185.43 (+0.29)          Digger H$25 Put (DIGER.PU) 25000 2.00 (0.00)          Practical Magic 2 (PRAC2) 150000 72.69 (-0.43)          Digger H$25 Call (DIGER.CA) 25000 2.00 (0.00)          Copperhead (COPRH) 150000 19.24 (+1.20)          Digger - Opening Weekend (DIGER.OW) 100000 25.00 (0.00)          Everest: The Other Side (EVTOS) 150000 2.00 (0.00)          Practical Magic 2 (PRAC2) 150000 72.69 (-0.43)          Scream 8 (SCRM8) 150000 46.90 (-0.70)          Practical Magic 2 (PRAC2) 150000 72.69 (-0.43)          Digger (DIGER) 150000 76.22 (-1.84)          Digger (DIGER) 150000 76.22 (-1.84)          Digger (DIGER) 150000 76.22 (-1.84)          Verity H$25 Call (VERTY.CA) 25000 2.00 (0.00)          Forgotten Island (FRGIS) 150000 51.77 (+0.30)          Verity H$25 Put (VERTY.PU) 25000 2.00 (0.00)          Forgotten Island (FRGIS) 150000 51.77 (+0.30)          Verity - Opening Weekend (VERTY.OW) 100000 25.00 (0.00)          Practical Magic 2 (PRAC2) 1 72.69 (-0.43)          Digger H$25 Call (DIGER.CA) 25000 2.00 (0.00)          Digger H$25 Put (DIGER.PU) 25000 2.00 (0.00)          Digger - Opening Weekend (DIGER.OW) 100000 25.00 (0.00)          Everest: The Other Side (EVTOS) 150000 2.00 (0.00)          Artificial (AIFIC) 50000 21.62 (+0.69)          Bad Lieutenant: Tokyo (BADLT) 150000 4.42 (+0.25)          Copperhead (COPRH) 1 19.24 (+1.20)          Everest: The Other Side (EVTOS) 150000 2.00 (0.00)          Copperhead (COPRH) 30000 19.24 (+1.20)          Seasons (SEASN) 150000 24.71 (+0.04)          Daniel and The Fiery Furnace (DANIL) 550 4.90 (-0.39)          Street Fighter (STFTR) 14423 75.61 (-1.14)          Your Mother Your Mother Your Mot (YOURM) 150000 7.23 (-0.07)          Anything But Ghosts (ANYBG) 150000 24.78 (+0.10)          Anything But Ghosts (ANYBG) 150000 24.78 (+0.10)          Misty Green (MSTYG) 150000 10.19 (-0.59)          King Spawn (SPWN2) 150000 0.02 (+0.01)          King Spawn (SPWN2) 150000 0.02 (+0.01)          Jay Baruchel (JBARU) 25000 53.03 (-0.50)          Street Fighter (STFTR) 14 75.61 (-1.14)          King Spawn (SPWN2) 150000 0.02 (+0.01)          Practical Magic 2 (PRAC2) 150000 72.69 (-0.43)          Chris Hemsworth (CHEMS) 25000 101.11 (+0.66)