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Which goes with my point that the difference is psychological. However they infer there is more to it than that. They keep quoting that Peter Achs turned 30k into a million using collars on BBY (or was it BBBY). They infer this is not possible with verticals. Thats stupid. I say why not? (IF...

They're long on rhetoric, short on Mathematics. Amusement value I suppose. :D

LOL That is EXACTLY what I said. The bloke that wrote that is Scott Kramer on the on his optionetics board. Also saw something similar he wrote on Yahoo in the last couple of days... can't remember where. I will try to find the URL where he said that and PM it to you. (if I can find it...

But... but... but... at least one of these guys claims to have turned about $3.57 in loose change into an amount equal to the GDP of Estonia within a year and a bit. (pardon my embellishment) Nobody has been able to mathematically prove it yet though. Here is what was posted on another...

This is something I've had heated discussions about as well. I'm in agreeance with the comments re synthetics from Mav, MTE et al. So why are these MM dudes giving the nod to the collar over the vertical. It doesn't make sense to me

Don't forget that this is the markets "implication" of forward volatility (hence "implied" volatility) It may or may not reflect the true probabilities or the volatility actually realized by expiry. That's where your own volatility projections come in (read - guesswork) Cheers

You need to use *trading days* so its about 23 days. The probability is about 68%, not 50%. But you're getting the idea Cheers

FA Is this via your brokers platform or somewhere on the net.. link? Cheers

My take: Implied volatility is the markets estimate of forward volatility, in other words it is a perception of risk. So what is this IV figure that is quoted? It is the measure of one standard deviation of price movement, annualized. So let's take a figure of 30% IV. This figure says...

Was I in conversation with you on this point? No, I was merely agreeing with a statement made by someone else. There was no argument in that.

Depends with what rigidity one applies to the term "chronically overvalued". I'm sure one could make a case against this. Everyone is smarter in retrospect, but ultimately a trader must make a volatility projection and decide in advance whether the risk is worth the reward. I must admit...

Agree, A good case for limited risk strategies... flies, condors etc.

It doesn't matter what the actual volatility figure is in determining over or under value. 100% vol could be considered cheap if the realized volatility is 150%. With indexes, implied volatilities are consistently higher than realized volatilities, therefore overvalued. All the while IVs...

I'm with MTE on this one for now. Without the means to prove it: There is more fear of a black swan in idicies, especially on the downside hence the vol smirk... also index options tend to be chronically overvalued. But certainly in the stocks I look at, there are FAR more occurences of...

Oh jeez! Excel! EEEK! I will take up the challenge and have a go... thanks.

I suspected that was the case, but I had this nice picture...... :D Yes I take your point re vol skews. But I suspect there are other reasons for that other than the thickness of the tails. I would be interested to see some statistical work on this... all dumbed down so I can understand...

Indeed they do. Native to SW Australia. Re: Indexes-stocks As an e.g., I refer to ELN a couple of years ago, where the giant sabre toothed black swan put in an appearance. (long thought extinct, but often proven otherwise) An undefendable and ruinous gap if short naked puts...

Perhaps indexes are generally a more "continuous" market. You can get gaps, but not huge gaps like individual stocks. This makes defense more viable. Black swans fly more often in stocks than indexes. $0.02

You said: I'm afraid it is a synthetic bull call spread, and alters the greeks that could destroy the original intent of a cc at entry price the CCs greeks are; + delta - gamma - vega + theta at entry price the collars greeks depend where the strikes are and gamma, vega and theta...

Just be sure to know that a collar IS a vertical spread and changes the greeks of a covered call i.e. Covered call = short put Collar = vertical spread Cheers