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If you know for certain they will go up, you can get more leverage by doing conversions, i.e.,buy a call and sell a put at the same strike. Depending on the prices, you might also use spreads, which are safer if you are wrong.

If not HTB (hard to borrow) for the life of the option you only lose any dividend. If it goes HTB and there is stock available, your losses are capped at the borrow cost, which could be substantial. If there is actually no stock available for borrow, then your losses are unlimited if the stock...

I didn't get mine at mid, but I did better than the ask. The real problem is finding one where the stock is not HTB, and not going HTB through the life of the spread (hard to guarantee). That way, getting assigned just means you hold the short/long position til expiry. Problem here is holding an...

Options... it's all Greek to me! :cool: Time to turn this into a pun thread.

It was a mistake. It wouldn't be a problem except UNXL is hard to borrow, and the borrow got worse. Of course, HTB was the only reason I could put the box on for a credit anyway... so like I said, noob mistake. Needed wide strikes to make it a credit.

Your books are really fantastic.

Yeah, definitely learned my lesson. Fwiw, got back about $1.50/share when the borrow came down and closed out 4 contracts. It might actually be better to wait to get assigned, saves me the wide spread on the 15 calls.

It's a really great point! The only reason I want to be rich is to stop doing extra work all the time and have more time with family.

VXX calls are a notoriously terrible investment. Just look at the price history.

I offered it as a box, but the spreads were pretty tight at the time. Probably gave up 0.35/share off the mid because I didn't want to face directional risk from the underlying hopping around so much... though I did do it as a limit order and waited for a fill. There was still a little juice...

Didn't see this the first time. It totally makes sense though. Man, no wonder you never find these with europeans! You know of anyone who ever modeled taking the other side of these?

Atticus, really, thanks again. Saving me from myself! As of the close, it looks like I am now down only about $1.75/share at the mid. You sure were right about the vol on these things being scary. Fingers crossed for a huge drop. :)

Just saw this. If it ain't gonna get much worse, I'll probably wait on it and hope the price collapses back down. No difference really between locking in the loss myself and getting it locked in for my by early ex... and probably not worth the drama of trying to dream up some clever hedge...

Thanks man. My idea was actually to go long the synthetic for the $1.60 credit, as my position net delta is -20 (whatever that actually means right now). It wouldn't be perfect, but might act as a hedge if the shares go further north, which I suspect would speed up the early ex on the 15s. If...

Right. So what on earth do I do? Am I forced to lock in the whole trade at a loss? I am trying to figure out how to limit the downside of waiting (i.e., early exercise risk on my short calls) but still retain some upside if I can make it to expiry? Is this just foolish? It's not that...

Thanks atticus. It was hard to borrow initially, but apparently that has blown out like crazy and I didn't realize the risks. The main problem is size. I can't even get into the May 40-synthetic to delta hedge without capitalizing some of the loss as all my margin is used up. Like I said...

Both. Without the bid/offer it is about 2.25 from the borrow.

Word. I know all this, but it certainly helps to be reminded. I guess my question had better be rephrased: I am currently in a position which will gain ~$2.95/share, if I can hold it until May expiry. Problem is, holding it eats up all my margin, and if the short call early exercises, I...

I was playing for 0.45 in a month on about $3.75 worth of margin. The strikes were 15/40, and my broker, Optionshouse charges essentially 15% extra margin on a box spread. So, $25/share x %15 = $3.75 margin, with me receiving $25.45 per share. Basically, I was expecting to just cash in the...

Max loss per share was supposed to be 25, i.e. the difference between my strikes of 15/40. Problem is, there is heavy short interest so the PCP violation severe. I started with net credit of 25.45 per share on a "max" liability of $25, so I thought I had an arb. Now, the stock has moved, the...