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His complaint stemmed from the idea that he had no idea what the difference is between intrinsic and extrinsic premium. Guys, this is why the regulators make brokers qualify clients before they can trade options. And this is why most on ET lie on those applications only to file complaints...

I agree, that's economics. Also part of a good education. But even if God himself told you exactly what the market would do, without understanding risk, you will never be able to properly price his advice.

Without finance skills you are not going to properly understand what risk is. Risk is not your stop. LOL. That's very elementary. The reason most people fail at anything in life whether it be sports, a small business or trading is because they are clueless about risk. A stop is not risk...

The options greeks are fine. They are simply partial differential equations. Math works fine in the real world.

Nobody in the professional world uses the word premium to associate with intrinsic value. Premium is always assumed to be just that, "premium" as in "over and above".

OK, now factor in probably a wide bid/ask spread (probably at least a dollar) and there you go, all the extrinsic premium is gone. On to next problem....world peace.

How much is the leap Put trading for at the 20 strike? That is your answer. Come on guys, put/call parity.

This is a very broad response to that statement as I'm sure it applies to many on this board. But trading and understanding risk is ENTIRELY about the things I mentioned. I don't even know how it's possible for one to survive long term without having a solid foundation in risk analysis...

You didn't learn about risk? About present value? Discount rates? Yield curves? Opportunity cost? NPV? Real Options? Project valuation? Trading is about math, it's about numbers, statistics, data. This is EXACTLY what finance is about. Are you sure you attended class? LOL.

If that is what you got out of your finance class you didn't attend class much.

Nice job Steve!

http://www.businessinsider.com/udf-visited-by-fbi-2016-2 https://udfexposed.com/ Thanks to Heavenskrow for digging this up. Kyle spoke about this extensively on the "wall street week" episode I posted about a month back.

He gave a great interview on the new "Wall Street Week" tv show (youtube) where he went over in detail how is going after all these companies and why.

He does good research. Good find.

How would it have a positive NPV? You have to "subtract" cost, in this case, the 200 pt ITM premium from the cash flows. Your future stream of cash flows should be valued off a random walk model meaning the NPV by definition should be exactly zero unless you feel the option is mispriced.

You mean a "super option"? You have to buy those from unicorns.

Show me the superstar hedge fund managers with a high school education. In fact, show me just one who is both successful and managing more then say 100 million. There are 6 billion people in the world, I need you to find one. You're on the clock....

The ONLY reason to ever buy an option is because you believe the expected net present value is greater then zero. Otherwise some other utility has to be derived from the ENPV being negative such that owning this option increases the ENPV of another holding.

Natural gas....new lows.

That's already provided for you in the first order condition of the option itself, known as delta.