Recent content by pberndt

Thank you. Thats the drawback on covered writes. You have to watch it on the dividend dates if you want to capture the dividend and you have a short call in the money. "you do not exercise your long calls or if you exercise them the next day, you pay the div. on your short stock." So...

I will take one more wack at this. Say I have an in the money call calendar spread. I have little time premium left and I am exercised on a dividend payout date. I am assigned. I now have to exercise my long call to cover myself because I am short stock. I will have to pay the...

If you are the writer you are responsible for delivery of the dividend along with the stock. That is what they mean by dividend risk in call options. Do you think the owners of the ETF are going to pay it? I grant you it doesnt happen that often but it can especially if you have little...

If you are called out of the postion and there is a dividend in play at the call out you pay the dividend because your short calls. You are not able to keep the dividend from your long position. You deliver the stock, you deliver the dividend, and you keep the time decay of the options.

I agree that you should not go out farther than three months. You want to capture the time decay in a rather short period. Personally I would just sell calls against my 900 shares of SPY and do your trade trying to set up about 5-7& a month return based on the call you sell. Also be aware...

The back month of your calendar spread will be the most sensitive to volatility. The father out you go the more volatility you will be buying. Thats why they can be very profitable in a low volatility environment or approaching earnings. As time decay works on your short strike then it becomes...

I agree with what has been posted. If you are buying options make sure you buy something deep in the money with at least a 75-80 delta. That way you have more intrinsic value of the option. I look at this just as much as what volatility is. I find doing directional plays too I trade a little...

Each option strategy has it's own plusses and minuses. There is no panacea as they all will work from just buying a put or call to vertical rolls and back ratio's. Some things to think about. How is your strategy effected by volatility? When do I put on this strategy or how many days...

I would start out with simple directional credit spreads, calendar spreads and cover calls or cash secured puts. Going into more advanced things like condors, strangle swaps, back-ratios and various butterflies takes alot of position management and capital to do it. Options are not a...

I agree, above average hurricane season predicted by NOA, refinery utilization down, OPEC cuts by 2%, China and India, summer driving season, will only lead to greater advances for the index. Many energy stocks had 20% moves after Katrina alone.