Recent content by delta_1

Good to know! Thank you!

It is a useful addition to portfolio even if you just buy and hold. The diversification effect is there. Some argue the more important thing is rebalancing some argue rebalancing is just necessary but the increase of the risk adjusted return comes from the diversification. Obviously this just...

Why would you say that? The bid-ask spread on Flow is merely 0.1%. When is thought about these stocks I stumbled upon an article "tail hedging with market makers". It kind of made me proud. When you have an "innovative" thought but you're unsure whether it is innovative or dumb because you...

This thread is rather about long term investing than short term trading... Everybody is probably going to expect some stock with great financial figures and a strong uptrend. Well, it does have decent figures but that is not what this is about. We all know diversification raises your risk...

It's a deep value play. There is one event which is going to push the stock from $20 to > $60. If the trigger evemt doesn't work out the stock could tank to < $5. The stock will move extremly fast or even gap so no chance to get out if it tanks and probably slim chance of getting in if it rises...

Here is a free ebook (legal to download) on options trading: https://www.trading-volatility.com/Trading-Volatility.pdf Using options to trade events like earnings (post earnings announcement drift = PEAD) is part of EUAN SINCLAIRs speciality. It's a chapter in his book positional option trading.

I'm not sure I understand: If I see an ask at $5 I would get the call for $5 using a market order, correct? The question if I could get it cheaper by using limit orders at mid price. Let's say the price rises sharply: I would probably not get out as the bid price on deep in the money implies a...

That's useful insight! Thank you! When the stock has a very illiquid day the spread can be up to 10% yet the bid ask spread on the options bid $2 ask $5 turns out to be 150% of the bid price. Obviously this should only be traded if the potential gain vastly outweighs the risk. Knowledge about...

The broker determines the borrow fee. He either gets the stock from other accounts or borrows it from other institutions. Here you can look up the highest stock borrow fees for IB: https://iborrowdesk.com/ The thing is you don't know how often or how long it is going to be lent out so could be...

I didn't want to mention the stock because this forum is often times aggressive for no reason. The thread would deviate from the real subject to discussions about how stupid it is to have a certain hypothesis about a stock or any other subject for that matter. This way we focus the discussion...

Yes, exactly. I have a big enough position in the stock and I don't want to increase my downside risk any more in case it sharply drops as it would be more than the $5 I'd pay for the option. Fishing is what I am thinking. Try at mid spread, then a little more and so on.

I wouldn't. The deep ITM calls are < than the current price even for the options that expire in two weeks. I do think that will change as huge liquidity should be coming back in the positive scenario. I don't bet on that liquidity. My plan is to keep the options until they expire in order to get...

A question to the more experienced option traders: It's mostly not advisable to trade illquid options - I know. Let's leave that general notion aside for a minute. I am looking at a stock that is in very unique environment: Conditional on a certain event happening in the coming 1-3 month the...