tag:blogger.com,1999:blog-99248112011-07-28T17:26:03.381-07:00Welcome to the Chicago Options Traders Blogger. Here we will discuss anything as it pertains to the options markets. I will be posting commentary from time to time as well as posting relevent articles, and answering questions from members concerning trading, options, strategy and theory.Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.comBlogger131100tag:blogger.com,1999:blog-9924811.post-1109811722531950262005-03-02T16:09:00.000-08:002005-03-02T17:15:03.320-08:00

When one decides to trade for a living, they often immerse themselves in books and classes, spend countless hours on the internet doing research or perhaps talking to fellow traders. They learn technical analysis, computer programming, stock fundamentals, they study economic indicators. They search for patterns in things. They go with the trend, they fade the trend. In the end, very few of these

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com105tag:blogger.com,1999:blog-9924811.post-1107756990690688122005-02-06T19:44:00.000-08:002005-02-06T22:16:30.690-08:00

In this case, we will focus upon the options "Stepladder" report, generated by most options risk management systems. When managing a portfolio of options, it is inconvenient to think of them on an individual basis. Indeed, a commercial bank foreign exchange options trader may have hundreds or thousands of options positions with different maturities in his portfolio at any given time. In addition

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com0tag:blogger.com,1999:blog-9924811.post-1107115818111995582005-01-30T12:07:00.000-08:002005-01-30T12:10:18.110-08:00

With the Superbowl one week away, office betting pools are in full swing. So are all the online betting sites. While the Superbowl brings in all sorts of weird and quirky side bets, like who will score the first touchdown and how many field goals will there be in the game, a majority of the money is still placed on the good old fashion line. Currently, the line is the Patriots – 6 ½. It always

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com1tag:blogger.com,1999:blog-9924811.post-1106361562597035752005-01-21T18:36:00.000-08:002005-01-21T22:16:55.580-08:00

Is it possible to participate in the upside of a long term bull market while having absolutely no risk to the downside? Why yes, it is possible. In fact, not only is it possible, but the product that makes this possible happens to be one of the more popular investment vehicles pushed by brokerage houses across the country. Although each brokerage house calls it something different, these

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com1tag:blogger.com,1999:blog-9924811.post-1105637084690446682005-01-13T09:21:00.000-08:002005-01-13T09:24:44.690-08:00

In previous articles we have compared products with linear payoff profiles to instruments with non-linear payoff profiles and we learned that only non-linear products have time value. We talked about the true meaning of time value to a derivatives professional and the question he must ask himself when evaluating a particular structure. "If I buy this structure, will I be able to make more money

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com0tag:blogger.com,1999:blog-9924811.post-1105464299264552472005-01-11T09:14:00.000-08:002005-01-11T09:24:59.266-08:00

This is just an early reminder for our next meeting which will be Monday, January 24th at 7pm at the Belmont Public Library. We will be having our first guest speaker Dan Sheridan. Dan was a 22-year CBOE market maker with and Mercury Trading where for the past 17 years he served as senior trader, trainer and risk manager. A dynamic presenter, Dan regularly teaches traders and retail investors on

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com1tag:blogger.com,1999:blog-9924811.post-1105312880790790712005-01-09T15:17:00.000-08:002005-01-09T15:31:04.720-08:00

Equity options can be risky. At least that’s what we are obligated to tell little Virginia when she asks. But we would be doing her a terrible disservice if we left it at that. We owe it to her and to ourselves a little better explanation. The concept of risk is one that very few people in this world understand. Take this guy, we’ll call him Bill, that says he doesn’t smoke because smoking

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com1tag:blogger.com,1999:blog-9924811.post-1105223731561840262005-01-08T14:29:00.000-08:002005-01-08T14:35:31.566-08:00

I have set up a message board on Google's beta site. This message board will be for posting trade ideas and getting feedback from other members on trades you are proposing. This blogger will be used for posting articles and commentary as well as meeting reminders. Feel free to continue to post comments about the commentary or articles. There is a link at the bottom of this blogger that will allow

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com0tag:blogger.com,1999:blog-9924811.post-1105210680506034932005-01-08T11:54:00.000-08:002005-01-08T13:05:36.183-08:00

The Nobel Prize in Economics was awarded to Robert Merton, Fischer Black and Myron Scholes for their pioneering work in establishing the foundation for the financial engineering that has revolutionized contemporary finance. They developed an intellectually elegant model that enables traders to take a set of observable prices and to calculate mathematically a price for an option. While some may

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com0tag:blogger.com,1999:blog-9924811.post-1105122991916856732005-01-07T11:27:00.000-08:002005-01-07T13:14:42.716-08:00

When we purchase an option, we can trade the cash instrument (called "trading spot" or "trading the cash"), hoping to realize more profit from trading the cash than we pay initially in premium for the option. When we sell an option, we hope that the premium that we are paid upfront dwarfs the losses we will sustain from trading the cash. When we buy options, we are said to be buying volatility.

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com5tag:blogger.com,1999:blog-9924811.post-1105034280314552232005-01-06T09:40:00.000-08:002005-01-06T09:59:55.513-08:00

These are in my opinion must read books in order to build a solid foundation in your options trading. They are listed in the order in which they should be read. Most of these books can be purchased used at Amazon. The Cottle book is actually an online PDF file that can be downloaded for free. You can e-mail me for the link. "Options as a Strategic Investment" by Lawrence G. McMillan "

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com5tag:blogger.com,1999:blog-9924811.post-1104946330849839102005-01-05T09:10:00.000-08:002005-01-05T10:38:37.440-08:00

If you ever stay up late at night, or watch TV early on the weekends, you'll often see infomercials on how to get rich trading. Many of these involve options. Two that come to mind are Optionetics and Options Made Easy. You'll often see free seminars packed with people curious how they too can work two hours a week and make millions on the side. They throw in the proverbial retired sixty five

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com12tag:blogger.com,1999:blog-9924811.post-1104783987148642922005-01-03T12:20:00.000-08:002005-01-03T12:26:27.146-08:00

I just wanted to take this time to welcome everyone to the Chicago Options Traders blog. I will be posting on here from time to time as well as answering questions from the group and also just allowing the group to interact with each other. I will also be posting relevant articles that I find of interest to the group. In order to post to the boards you need to register. Very simple and painfree

Johnhttp://www.blogger.com/profile/08001227010888834416noreply@blogger.com32