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Just came across this thread...Thanks Phil. I also believe CEF are a great tool. Some comments: 1. Why CEF's?: Because of efficiency (.i.e., no need for fund manager to maintain liquid assets for redemptions, etc. Can maximize entire pool of funds into investments. Number 2, because of...

One other question: What is the LEGAL interpretation of soliciting outside money from "investors / traders / etc"...pooling it together in some sort of LLP or LLC and then that organization joining a Prop Firm? Does that fall under Regulatory oversight? Registered Investment Company...

Sorry everyone for the confusion, but thank you also for all of the explanations. Yes, Phil...I meant SP, the futures contracts. And I certainly understand the "value" differences between 1 contract in each ($50 ES; $100 SPX; $250 SP). So....unless I'm still misunderstanding something...

Phil, Michael: thanks for the replies...let me get this right: are you saying Phil, that when you enter a futures contract (long), the entry value is higher ("cost of carry") than current cash index (upon which the CBOE "spx" is based)? Therefore, if the moment I purchase a long SPX...

How can that be?? Today, SPX is trading at 1284. say March expiration, the March 1285 Calls are trading at 25.20 - 27.20 The March 1285 Puts are trading at 20.80 - 22.80 Clearly, going long a futures contract (no cost other than margin req) and buying a put provides breakeven at 1306...

When evaluating ATM options on indicies, the ATM put is typically much cheaper than the ATM call. Assuming a trader is bullish on the index.... it seems that going long a futures contract(s) with a simultaneous purchase of ATM put(s) is more desirable than a simple ATM call purchase. Am I...

Let me try to clear up some items when investing in fixed income securities: 1. If preservation of principal (i.e. safety) is primary concern, then one must only consider higher rated bonds (AA or better). 2. Once you itemize all available AA or better rated bonds, then evaluate if there...

Don: No gotchas..., Fed farm Credit and Fed Home Loan Bank are two good choices for agency bonds. Yes, they are state and local tax exempt (unlike freddie and fannie). The only item you need to possibly evaluate are "call features". Is this a callable bond? Wouldn't think so at one year...

What kind of margin requirement do you have when selling naked strangles? At 2.0 SD, there would typically be very little premium if selling spreads.

Don: If you definitely want TIPS, the easiest and most diversified way to go is simply purchasing i-shares TIPS ETF. Keep in mind...you are exchanging potential partial inflation hedge against slightly longer term (intermediate) exposure on the yield curve. Very short treasuries...

Don: Basically, you are right. The yield curve is a dynamic, ever changing, unpredictable measurement. When assessing "equal" credit quality debt securities, the "spread" between that instrument and "risk free" treasuries is important. That is why some investors get enamored with junk bonds...

Phil: Do Institutional option traders get better pricing on transactions than what is available to retail traders like OX, ToS, or IB?? If so, what kind of level allows institutional designation? Do you know of any institutional option brokerages? Thanks

Phil: I had similar experiences getting set up with IB. Then, after all the effort (no quotes on base platform)....I can't trade SPU options!! They do not (at least did not last year) offer options on the large SP 500.

Went through this whole evaluation process myself a while back. Since I was not in front of my home computer all day, decided to open OE account due to full internet application superiority. In processing the plethora of paperwork, I needed to ask some questions so I called by phone as well...

Phil: I've been using basically the same strategy for one year. However, much smaller account size than yours along with these differences: A. Usually, only one position per month. Trying to go as far OTM as I can to capture between 5-12% of margin requirement. B. I have used total...

Riskarb: If possible, can you tell me more of the discrepancies of trading S&P 500 options on the CME (SPAN) vs. CBOE (Reg T). I am interested in selling put and call spreads with limited resources. I find some great online brokers (Think or Swim & OptionsXpress) on the stock side but...

I am a fundamentalist; constantly trying to reduce information into meaningful parts....so please!! all option experts correct my logic: 1. I sell a spread for a credit (call spread far OTM above the market and a put spread far OTM below the market) 2. If the volatility is HIGH (relatively...

Help Please.... I've been to the Optionetics intro and walked away like most of you...more slick sales (20-30 hands went up agreeing to the 2 day seminar...at $3K a pop; go figure!) In fact, they sealed their fate with me when I saw them in the middle of the night on an Infomercial...