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Imagine you're in a futures pit. At the moment, everybody is 3 bid at 4. That means everybody wants to buy at 3, and sell at 4. You want to buy at 3 and sell at 4 too. Why? Because at that moment, if you can buy at 3 (or "pay 3" in pit parlance), you have the edge. For at least a split...

Neat trick! I also like the flexibility of arranging data the way I like in Excel spreadsheets. I find Hoadley add-in option functions a very useful tool - and a great deal at about $100. DDE works to get price info into spreadsheets, but is clumsy if you're dealing with more than a few...

What about reversals? Wouldn't your short stock margining benefit from PM? Thanks.

Also, I've been following crude options pretty closely, and it's been a very long time since they traded below 30%. 28% is just wrong.

The problem is the IB IV quotes, which are wrong. As you correctly suspected, IB is using the wrong expiration date - July 1. Using 25 days remaining you indeed get an IV of about 28% for the 134 calls. But if you go to http://www.nymex.com/lsco_opt_expira.aspx you will see that the...

Thanks Xflat for that detailed explanation. Most people think of futures as arcane but compared to stocks, it seems to me that futures are actually very straightforward and simple. Maybe it's just what you're used to, but in futures there are no dividends to worry about and no "hard to...

Well that explains some of it. I'm still not clear why that generates such massive ITM call volume. Xflat - if you have a moment - what are dividend lottery spreads? Thanks.

Where's the best place to get info about dividends and x-div dates?

If you look at MCD June calls, there was huge volume today in consecutive ITM calls - the 45 calls through the 52.5 calls. On previous days these barely traded. Does anyone have a theory what this is all about? Thanks.

Premiums are mighty pumped in LEH - about 140% ATM - be careful!

In addition, I believe individual firms can offer penny increments internally in additional stocks. In IB for example, imagine stock xyz that is not on the official industry-wide penny list, but is on their internal penny list. If I understood correctly, let's say you offer an option on...

QUOTE] dmo... when and where is the settlement price published? thanks [/B] The settlement prices are published by the exchanges and are available on their websites. They are also available from data services such as DTN IQ, e-signal, etc. If you have a position, the settlement price is...

In options on futures, the only meaningful EOD price is the "settlement" price, which is an officially-determined price that lies somewhere between bid and ask and leaves no risk-free arbitrages. The "last" price is pretty meaningless, as it may have occurred hours before the close when the...

Pretty similar, although keep in mind that ETF's and their options are regulated by the SEC, while futures and their options are regulated by the CFTC. In practical terms, that means different margining - on the futures side it is risk margining done by the SPAN system. One technical point...

What is a steepness level?

QQ, my experience with Schwab is that they are conservative to a fault - perhaps excessively so. I would guess their policies about borrowing stock are also on the highly conservative side - probably to avoid just the situation you mentioned where they have to force a customer to liquidate a...

Very well said. You can slice and dice your risk/reward a zillion ways with options, but at the end of the day this simple truth will hold.

I think that's about right. In reality though it's not a zero-sum game because in reality you either get caught in a truly catastrophic loss or you don't. Trouble is, one-in-a-lifetime catastrophes seem to happen with some frequency. I knew guys in grains who got Chernobylized in 1986. At...

Thanks for your reply QQ. Ironically, Schwab was the company that "could not" borrow the stock, which was USO. A few minutes later I shorted a few hundred shares with no problem in my newly-opened IB account. I thought maybe it was a mistake and they would blow me out of it overnight, but...

I confess that I'm completely and totally baffled by this whole stock-shorting thing. I've now had the experience of having one firm telling me it could not borrow a stock inside or outside the firm no way no how - after which I shorted it 20 minutes later no-questions-asked in an account...