rio time to go short ? rembrandt ?, page-63

re: rio puts ... buffalo cruncher .. kman Hi Kman ... BC is huge beast the result of over 5 years development and is under lock and key ... mrs rem would have my 'whatsanames' if I let it out ... lol

The latest incarnation has been developed specifically for what I call the Buffalo Backspread which comprises a SOLD pozzie of a LOW yield Option and a ratio (say 4:1) BOUGHT pozzie with HIGH yield Option in credit.

BC not only analyses the various Option offerings as we have seen it do ... but then selects the optimum BackSpread Combination ...

BC operates in REAL TIME and provides up to the minute profit/loss analysis of the position ...

This attempts to maximise profits and provide an almost riskless trade ... I am fine tuning this now.

Needless to say BC is extremely complex and computer power is an issue ...

Anyone can setup a spreadsheet that will do elements of BC providing you have an OPM such as BS or Binomial. I have modified a Binomial OPM for discrete dividends so BC is accurate in this regard.

The basis of BC is to firstly have a VIEW of near term movement of the UNDERLYING and then to create a projection to a point forward in TIME according to your own trading strategy ...

As TIME is an Input for all OPM's you can analyse any range of Option Offerings accordingly ...

The spreadsheet requires fair bit of work to create initially but save it a template then you can have one for each stock.

If you trade Options it is worthwhile exploring the maths associated with OPM's and spreadsheets as part of the journey ... it will increase your profits and a worthwhile burning the midnight oil ...

You can download a simple BSOPM spreadsheet from my webspace. This contains the macros/functions/formula to calculate FAIR VALUE of one Option but a spreadsheet could easily be created so as to calculate for a range/projection as discussed.

Cheers ... hope this helps.


This is only my view ... read the red stuff.