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.

 





Post a Reply

To post to the forums you must first login!


Lice (LICE) 150000 4.36 (+0.36)          Lice (LICE) 150000 4.36 (+0.36)          Supergirl (SUPGR) 150000 144.35 (+5.62)          Fortitude (FRTUD) 150000 10.00 (0.00)          42.6 Years (426YR) 100000 9.38 (-0.08)          Minions & Monsters H$75 Call (MNIO3.CA) 25000 2.86 (+0.86)          Fortitude (FRTUD) 150000 10.00 (0.00)          Ken Russell's The Devil (KRSTD) 150000 1.87 (-0.03)          The Comebacker (CMBAC) 150000 28.72 (+1.21)          Young Washington H$10 Put (YWASH.PU) 25000 1.69 (-0.31)          Priscilla: Queen of the Desert 2 (APQD2) 100000 4.29 (-0.10)          Ghost of Tsushima (GOTSU) 100000 10.03 (-0.24)          Backrooms (BACRM) 150000 165.22 (+0.17)          Supergirl - Opening Weekend (SUPGR.OW) 100000 55.16 (-1.08)          Minions & Monsters - Opening (MNIO3.OW) 30000 77.28 (+2.28)          Fortitude (FRTUD) 2000 10.00 (0.00)          Moana (MOAN1) 150000 237.21 (-1.45)          Moana (MOAN1) 103942 237.21 (-1.45)          Moana (MOAN1) 46058 237.21 (-1.45)          Moana (MOAN1) 150000 237.21 (-1.45)          Wicker (WCKER) 150000 5.50 (+0.58)          Wicker (WCKER) 150000 5.50 (+0.58)          Lice (LICE) 150000 4.36 (+0.36)          Lice (LICE) 150000 4.36 (+0.36)          Jungle Cruise 2 (JUNG2) 10000 16.41 (-0.02)          Fortitude (FRTUD) 149500 10.00 (0.00)          Klara and the Sun (KLARA) 150000 22.74 (+0.68)          Fortitude (FRTUD) 150000 10.00 (0.00)          Klara and the Sun (KLARA) 150000 22.74 (+0.68)          Lice (LICE) 150000 4.36 (+0.36)          Fortitude (FRTUD) 150000 10.00 (0.00)          Lice (LICE) 150000 4.36 (+0.36)          The Comebacker (CMBAC) 150000 28.72 (+1.21)          The Comebacker (CMBAC) 150000 28.72 (+1.21)          The Comebacker (CMBAC) 150000 28.72 (+1.21)          The Comebacker (CMBAC) 150000 28.72 (+1.21)          The Comebacker (CMBAC) 150000 28.72 (+1.21)          Lice (LICE) 150000 4.36 (+0.36)          Fortitude (FRTUD) 149995 10.00 (0.00)          Fortitude (FRTUD) 150000 10.00 (0.00)          Star Wars: The Mandalorian and G (SWAR3.BW) 25000 7.33 (+0.34)          The Death of Robin Hood H$10 Put (TDORH.PU) 25000 2.83 (+0.02)          Fortitude (FRTUD) 35000 10.00 (0.00)          Gatto (GATTO) 1000 134.54 (-0.02)          The Death of Robin Hood (TDORH) 20000 16.60 (-0.42)          Klara and the Sun (KLARA) 20000 22.74 (+0.68)          Jason Statham Stole My Bike (JSSMB) 150000 25.63 (+0.50)          The Death of Robin Hood (TDORH) 10000 16.60 (-0.42)          Dune: Part Three (DUNE3) 3102 242.83 (-0.73)          Fortitude (FRTUD) 25000 10.00 (0.00)