Stock Exchange Of Thailand, Set Could Get Hammered

[lannarebirth]

Sorry but yes you did .... you said you are" sure to get paid" and you said "Riskless" which means you can't lose money, and then went on to try and explain yourself , just listen and learn dude don't argue or backtrack just admit I might actually know what I am talking about. ....... However you are correct if he put in a limit order for price X and it filled, he would lose less with a put order at price X ...... the reason for that is he is getting paid for the risk you don't understand , that risk is a severe downturn in the stock that would change his mind about wanting to own it. Or a severe downturn in the markets .....

Don't kid yourself that some 100 dollar stock that looks good today at 80 looks just as good for 80 at 60 .... the risk you get paid for taking is you are esentially locked in for the overnight crash. The reason to NOT sell puts would be the market is unstable .....like it is now ..... and some calamity like the euro problems would make you wish you haden't agreed to buy the stock at prices reflecting the before the calamity market ..... Because where it goes after you buy it IS NOT IRELEVANT ! lol .....

So to answer the overall question selling puts in a market where growth seems questionable , Europe seems questionable , Jobs seem questionable , China seems to be slowing , as a strategy to pick up a stock at a discount is not very sensible on a risk reward basis as the possible downturn is far more severe than the preimum you will get for taking that risk.

You should start a blog. Anyhow I don't give a dam_n about the stock or the market or how someone feels today or tomorrow. I only mentioned a strategy to either collect money on a stock you want to purchase or purchase it for less. After it's yours where it goes is between you and the market. Cheers.

[fletchsmile]

While I have your attention ... is there an 'options expert' who regularly posts here.

Once the market picks up a bit, I wouldn't mind selling some covered calls on the shares I own.

Thanks in Advance.

To all the replies here ... thanks very much ...

I have option traded for more then 8 years in my home country so fully understand the principles involved. lannarebirth ... great link explaining most things.

What I am interested really in is anyone here doing this in Thailand on/with Thai stocks?

....

There are currently no TFEX exchange traded options on individual stocks. There are options on the SET50 index.

There are futures on about 30 individual Thai stocks on TFEX, as well as futures on thr SET50 index.

http://marketdata.se...do?locale=en_US

http://www.tfex.co.t...tions-spec.html

Over the last few weeks, I've been looking to sell some OTM calls on SET50 to generate a little extra income, against long term holdings (long) positions in Thai mutual funds. I was also looking to buy some puts for downside protection. Two drawbacks:

1) The TFEX options market is quite thin though, with only the nearest 3 months having much in the way of activity.

2) There also hasn't been that much interest in either of these trades at levels of interest to me on pricing, as most people seem to have been looking to buy protection (or should I say punt on the downside given the short time frame) in the last few weeks, and it's really been a seller's market most of the time, for those prepared to write put options.

What I've ended up doing is selling a few OTM puts in the 670 - 740 range for June settlement, and then closing some out as markets pick up. I figured these were far enough out of the money and the prices people are prepared to pay above theoretical value fair value attractive enough for some activity. As it's not my preferred trade though, and I'm just going were the opportunities are, I haven't done a great deal, but it's useful for having another (very small) string to your bow.

BTW I don't know any experts that play and make large money out of the TFEX options market, but it's a nice leisurely side show. The Thai futures market is much more active than the options market.

Edited June 6, 2012 by fletchsmile

[fletchsmile]

Well the first thing I would point out is options are illegal in Thailand ! LOL ..... So it might render the discussion about buying them or selling them on the SET Moot ! LOL

The government or perhaps the King himself sees options as gambling is the reason options are not available on the SET .....

I think someone has misinformed you on that. I do a small amount of trading SET50 options on TFEX. It's not illegal.

http://marketdata.se...do?locale=en_US

Edited June 6, 2012 by fletchsmile

[David48]

Thanks to all who contributed above.

May I refine my question as we do seem to have some experienced traders.

Firstly, I'm not overly interested in the trading SET futures ... it's just not my go.

What interests me is the following scenario ...

I buy say 300,000 BTS shares @ ฿0.77

I'm happy to hold them if the price drops (as long as the reason for the drop is market sentiment and a fundamental issue) as they pay a dividend better then a Term Deposit ... and I like infrastructure stocks. Yes, I know they do Advertising and property development etc.

If the price goes to ฿0.80 in the next month or two ... I'm happy to sell them.

I've made ฿0.03 per share plus what ever I got for the sale of the initial option.

If the price goes to ฿0.90 ... then I happy for the buyer who bought my sold options ... good luck to them for taking a punt.

If the BTS shares go to ฿0.79, then great, I've made a bit of pocket money and then sell say a ฿0.85 cover call for the next 2 months and see what happens.

Is the scenario above possible with some SET stocks?

Yes, I have asked my Thai Stockbroker, and no, she doesn't know the answer ... but some things get lost in translation ... hence my question to this Forum.

As always ... thanks in advance for your comment, advice and thoughts.

[fletchsmile]

Thanks to all who contributed above.

May I refine my question as we do seem to have some experienced traders.

Firstly, I'm not overly interested in the trading SET futures ... it's just not my go.

What interests me is the following scenario ...

I buy say 300,000 BTS shares @ ฿0.77

I'm happy to hold them if the price drops (as long as the reason for the drop is market sentiment and a fundamental issue) as they pay a dividend better then a Term Deposit ... and I like infrastructure stocks. Yes, I know they do Advertising and property development etc.

If the price goes to ฿0.80 in the next month or two ... I'm happy to sell them.

I've made ฿0.03 per share plus what ever I got for the sale of the initial option.

If the price goes to ฿0.90 ... then I happy for the buyer who bought my sold options ... good luck to them for taking a punt.

If the BTS shares go to ฿0.79, then great, I've made a bit of pocket money and then sell say a ฿0.85 cover call for the next 2 months and see what happens.

Is the scenario above possible with some SET stocks?

Yes, I have asked my Thai Stockbroker, and no, she doesn't know the answer ... but some things get lost in translation ... hence my question to this Forum.

As always ... thanks in advance for your comment, advice and thoughts.

No the scenario is not possible in Thailand at the moment. There are no TFEX option contracts on individual/single stocks such as BTS. There are options on the SET50 index but not on individual/single stocks.

Summary of available:

BTS Stocks: Yes

BTS Options: No

BTS Futures: Yes

SET50 Index Options: Yes

SET50 Index Futures: Yes

If you click on the following link and select "instrument type" you can see the availables

http://marketdata.se...CB?locale=en_US

Edited June 7, 2012 by fletchsmile

[yoshiwara]

Sorry but yes you did .... you said you are" sure to get paid" and you said "Riskless" which means you can't lose money, and then went on to try and explain yourself , just listen and learn dude don't argue or backtrack just admit I might actually know what I am talking about. ....... However you are correct if he put in a limit order for price X and it filled, he would lose less with a put order at price X ...... the reason for that is he is getting paid for the risk you don't understand , that risk is a severe downturn in the stock that would change his mind about wanting to own it. Or a severe downturn in the markets .....

Don't kid yourself that some 100 dollar stock that looks good today at 80 looks just as good for 80 at 60 .... the risk you get paid for taking is you are esentially locked in for the overnight crash. The reason to NOT sell puts would be the market is unstable .....like it is now ..... and some calamity like the euro problems would make you wish you haden't agreed to buy the stock at prices reflecting the before the calamity market ..... Because where it goes after you buy it IS NOT IRELEVANT ! lol .....

So to answer the overall question selling puts in a market where growth seems questionable , Europe seems questionable , Jobs seem questionable , China seems to be slowing , as a strategy to pick up a stock at a discount is not very sensible on a risk reward basis as the possible downturn is far more severe than the preimum you will get for taking that risk.

You should start a blog. Anyhow I don't give a dam_n about the stock or the market or how someone feels today or tomorrow. I only mentioned a strategy to either collect money on a stock you want to purchase or purchase it for less. After it's yours where it goes is between you and the market. Cheers.

Yes you will collect commission if you sell puts, but if the price of the stock goes down beyond the strike price and commission you will find it increasingly expensive to close your position. The cost to you will be higher than the commission. You will lose money.

Edited June 9, 2012 by yoshiwara

[David48]

Thanks to everyone who replied.

I have my answer and that is that I can't sell covered calls over stocks I own on the SET.

The OP and the next two posts were for information and discussion.

Time for this thread to close please ...

Edited June 10, 2012 by thaiphoon
Off-topic link removed

[yoshiwara]

Thanks to everyone who replied.

I have my answer and that is that I can't sell covered calls over stocks I own on the SET.

The OP and the next two posts were for information and discussion.

Time for this thread to close please ...

Your own personal query may have been answered but sometimes threads evolve into interesting areas which stimulate discussion beyond the original post.

[thaiphoon]

Thanks to everyone who replied.

I have my answer and that is that I can't sell covered calls over stocks I own on the SET.

The OP and the next two posts were for information and discussion.

Time for this thread to close please ...

Your own personal query may have been answered but sometimes threads evolve into interesting areas which stimulate discussion beyond the original post.

Indeed, and for that reason we will leave the topic open for the time being.

[lannarebirth]

Sorry but yes you did .... you said you are" sure to get paid" and you said "Riskless" which means you can't lose money, and then went on to try and explain yourself , just listen and learn dude don't argue or backtrack just admit I might actually know what I am talking about. ....... However you are correct if he put in a limit order for price X and it filled, he would lose less with a put order at price X ...... the reason for that is he is getting paid for the risk you don't understand , that risk is a severe downturn in the stock that would change his mind about wanting to own it. Or a severe downturn in the markets .....

Don't kid yourself that some 100 dollar stock that looks good today at 80 looks just as good for 80 at 60 .... the risk you get paid for taking is you are esentially locked in for the overnight crash. The reason to NOT sell puts would be the market is unstable .....like it is now ..... and some calamity like the euro problems would make you wish you haden't agreed to buy the stock at prices reflecting the before the calamity market ..... Because where it goes after you buy it IS NOT IRELEVANT ! lol .....

So to answer the overall question selling puts in a market where growth seems questionable , Europe seems questionable , Jobs seem questionable , China seems to be slowing , as a strategy to pick up a stock at a discount is not very sensible on a risk reward basis as the possible downturn is far more severe than the preimum you will get for taking that risk.

You should start a blog. Anyhow I don't give a dam_n about the stock or the market or how someone feels today or tomorrow. I only mentioned a strategy to either collect money on a stock you want to purchase or purchase it for less. After it's yours where it goes is between you and the market. Cheers.

Yes you will collect commission if you sell puts, but if the price of the stock goes down beyond the strike price and commission you will find it increasingly expensive to close your position. The cost to you will be higher than the commission. You will lose money.

The strike price is at the price he was comfortable to purchase the stock (whether or not it subsequently went up or down). Never mind. Jesus!