Options Time Spread, Jelly Rolls, and Reversals with Goldman Sachs (GS) | Trade Options Like a DPM Webinars #3

Tweet Options Time Spread, Jelly Rolls, and Reversals with Goldman Sachs (GS) | Trade Options Like a DPM Webinars #3

http://twitter.com/hamzeianalytics - The Admiral, a former CBOE Designated Primary Market Maker (DPM), continues his lesson on calendar spreads by demonstrating an advanced use of structuring time spreads as jelly rolls.  He extends the example a bit further, taking advantage of risk reversal strategies mentioned in a previous lessons to construct options positions with essentially no-risk (or riskless money).

This an excerpt from the "Trade Options like a DPM Webinar #3 - Calendars/Time Spreads: http://hamzeianalytics.com/pow_register.asp



"CALENDARS & TIME SPREADS" OPTIONS WEBINAR DESCRIPTION

An options or futures spread established by simultaneously entering a long and short position on the same underlying asset but with different delivery months. Sometimes referred to as an interdelivery, intramarket, time or horizontal spread.


ABOUT "THE ADMIRAL"

The featured speaker, whom we affectionately call "The Admiral," was a Designated Primary Market Maker (DPM) on the floor of the CBOE for five years. Although we're not using his real name (so don't ask!) suffice it to say that we consider him to be one of the most knowledgeable option traders on the planet. As a floor trader in the '80s and '90s he did the opening options rotation for 5-25 stocks the old-fashioned open outcry way—meaning he opened each option strike price for each of these stocks within the first 30 minutes of trading, both calls and puts.

That meant he had to price more than 500 option strikes, plus as a market maker he traded and kept the markets current. As a DPM, technology brought forth auto-quoting of option series, but pricing of those quotes remained his responsibility. Trading 1 million shares of stocks and 50,000 options contracts was a normal day for him. In 27 years at CBOE, he has traded through the crash of '87, the smaller crash of '90 and the tech bubble in 2000. He has traded three-digit volatility and seen every possible market environment imaginable. So, if you're going to learn options, it might as well be from the very best.

Options Time Spread VMW Example | Trade Options Like a DPM Webinars #3: Calendar Spreads

Tweet Options Time Spread VMW Example | Trade Options Like a DPM Webinars #3: Calendar Spreads

The Admiral, a former CBOE Designated Primary Market Maker (DPM), continues his first example of implementing an options time spread using VM Ware (VMW) as the sample underlying stock.  The Admiral goes through each step of identifying the trade and the potential targets for the underlying stock, finding the option months and strikes, constructing the time spread, and analyzing the time spread.



This an excerpt from the "Trade Options like a DPM Webinar #3 - Calendars & Time Spreads: http://hamzeianalytics.com/pow_register.asp


"CALENDARS & TIME SPREADS" OPTIONS WEBINAR DESCRIPTION

An options or futures spread established by simultaneously entering a long and short position on the same underlying asset but with different delivery months. Sometimes referred to as an interdelivery, intramarket, time or horizontal spread.


ABOUT "THE ADMIRAL"

The featured speaker, whom we affectionately call "The Admiral," was a Designated Primary Market Maker (DPM) on the floor of the CBOE for five years. Although we're not using his real name (so don't ask!) suffice it to say that we consider him to be one of the most knowledgeable option traders on the planet. As a floor trader in the '80s and '90s he did the opening options rotation for 5-25 stocks the old-fashioned open outcry way—meaning he opened each option strike price for each of these stocks within the first 30 minutes of trading, both calls and puts.

That meant he had to price more than 500 option strikes, plus as a market maker he traded and kept the markets current. As a DPM, technology brought forth auto-quoting of option series, but pricing of those quotes remained his responsibility. Trading 1 million shares of stocks and 50,000 options contracts was a normal day for him. In 27 years at CBOE, he has traded through the crash of '87, the smaller crash of '90 and the tech bubble in 2000. He has traded three-digit volatility and seen every possible market environment imaginable. So, if you're going to learn options, it might as well be from the very best.

Options Time Spreads Basics Excerpt | Trade Options Like a DPM Webinars #3: Calendar Spreads

Tweet Options Time Spreads Basics Excerpt | Trade Options Like a DPM Webinars #3: Calendar Spreads

The options calendar spread, or time spread, was the first options spread The Admiral, used when he first became a market maker on the floor of the CBOE.  In this excerpt from the "Calendars" Options Webinar presentation, The Admiral explains the basics of a calendar spread, how to price a calendar spread, and the relatively low-cost and low exposure to deltas.



This an excerpt from the "Trade Options like a DPM Webinar #3 - Calendars & Time Spreads: http://hamzeianalytics.com/pow_register.asp


"CALENDARS & TIME SPREADS" OPTIONS WEBINAR DESCRIPTION

An options or futures spread established by simultaneously entering a long and short position on the same underlying asset but with different delivery months. Sometimes referred to as an interdelivery, intramarket, time or horizontal spread.


ABOUT "THE ADMIRAL"

The featured speaker, whom we affectionately call "The Admiral," was a Designated Primary Market Maker (DPM) on the floor of the CBOE for five years. Although we're not using his real name (so don't ask!) suffice it to say that we consider him to be one of the most knowledgeable option traders on the planet. As a floor trader in the '80s and '90s he did the opening options rotation for 5-25 stocks the old-fashioned open outcry way—meaning he opened each option strike price for each of these stocks within the first 30 minutes of trading, both calls and puts.

That meant he had to price more than 500 option strikes, plus as a market maker he traded and kept the markets current. As a DPM, technology brought forth auto-quoting of option series, but pricing of those quotes remained his responsibility. Trading 1 million shares of stocks and 50,000 options contracts was a normal day for him. In 27 years at CBOE, he has traded through the crash of '87, the smaller crash of '90 and the tech bubble in 2000. He has traded three-digit volatility and seen every possible market environment imaginable. So, if you're going to learn options, it might as well be from the very best.