Recent content by hypercube

The 4600$ displayed refer to the margin requirements for your whole account including your other positions. Where do you see the 3700 figure anyway? On IB I can buy that call option with a margin requirement of 105$.

If you have a point, just make it. I was referring to the case of putting a sell order at about the current market price on a given day (so effectively a market order), not a good-till-cancel limit order. Not as an example of how the wheel operates, but to say that if you replace your market...

It seems you can't read. I've said explicitly several times it is not always superior, including in the post you quote. It is superior if you look at the payoff on expiration day, though, which is exactly what I wrote. And JSOP's argument was bullshit.

I have refuted your lengthy explanations twice and you still don't get it. You don't even attempt to address any of my points. It's not so hard to understand. If you are looking only at what will happen in, say, a month from now, then, whenever you set a limit order to buy a stock at X, you'd be...

@tsznecki Your post was removed because I reported it for your false accusation and unwarranted insults. I should do it again but I guess it's easier simply to put idiots like you in my ignore list. Obviously you can't contribute to the discussion or give any arguments about the content of my...

Well I have also refuted your claims, for example in the post you are citing. Besides, your "opportunity cost" analysis is totally wrong. There is an opportunity cost in buying/selling the stocks directly that you keep ignoring. You fail to realize that if today you have decided to buy a stock...

That's quite a meaningless comment to make. Sure, if you assume markets are perfectly efficient, then there is no "alpha" in this strategy, or any other. Is there any strategy that you wouldn't object to on exactly the same grounds? Part of the edge of this strategy is that it is very forgiving...

If anyone is trolling it must be you, because several people have explained the flaws in your dismissal of the strategy, yet you still keep insisting on your factually wrong views. Your example of "stock dropped from 40 to 20 and you bought it at 20" doesn't show anything. First, because when...

I disagree with this. First, this strategy does not hinge on the stock being in an uptrend at all; it only assumes that it is not in a very sharp downtrend. It will be profitable also if the stock moves sideways (e.g., NVIDIA) or even goes down as long as it doesn't go beyond your strike price...

You missed my point completely as your answer is completely irrelevant to what I (or the OP) am saying. I was saying that OP's reasoning is incorrect because the log of the price can perfectly be negative and the model is applied to the log, so nothing wrong with that. It is not true that the...

The normal distribution used in financial models such as Black-Scholes is on the logarithm of the stock prices, which can be negative.