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Thread: Trade Ideas

  1. #1

    Default Trade Ideas

    Your idea guys on possible option trade?

    TLT - Last Price 94.86
    Target Price 97.94
    Target Date 14/07/2005

    chains can be found on http://www.cboe.com/DelayedQuote/QuoteTable.aspx

    IV: see chart below
    Attached Images   

  2. #2
    Rotaredom wayneL's Avatar
    Join Date
    Jul 2004

    Default Re: Trade Ideas

    calls @ 7% IV
    puts @ 14% IV

    To take advantage of the non parity we can use the EFT(stock)

    A reversal would be a risk free trade

    short EFT
    sell $96 july/aug puts
    buy $96 july/aug calls

    in equal position sizes....capital intensive but risk free

    Another risk free alternative is a synthetic vertical

    short EFT
    sell july/aug $97 calls
    buy july/aug $95 puts

    Again capital intensive but risk free....more profit at target price

    Otherwise, calls are that cheap, a straight out buy would be OK

    Would not sell puts naked as a surprise to the downside would hurt...and...are the put IV's saying something? What if the Fed surprises with a bigger hike? Tankage!......Much much less risk than an ordinary stock though.


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