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As mentioned, GS is getting out of this business. I was trading through them from an introducing broker and left about 6 months ago. This is business they don't want anymore. Your best bet to trade with them would be going through an existing JBO, although this may have many other risks...

Here is the typical way it works with an instrument like the SPX. After a trade is made, the MM will immediately trade the appropriate number of S&P futures to hedge the position, the goal being to make the trade delta neutral. Depending on the size of the trade, the MM will lower or raise...

To create a synthetically long position in a stock, you would be long a call, and short a put of the same strike In a hard to borrow stock, extra premium is written into the puts and is taken out of the calls. So in a normal buywrite position you are short the calls and long the stock...

Another big reason to sell a put vs a covered call, Any hard to borrow stock will give you a great advantage in selling the put. If you write a covered call, you are allowing your brokerage firm to make extra money by loaning out your long stock. If you sell the put, you are essentially...

Anyone trying a dividend play in SPY today?

LOL Yes of course you are right, I am assuming he sold the call for .02 under so 13.30 vs 16.32, or 12.30 vs 15.32. Assuming he had typo.

I am assuming you did the Jan 13th 2013 3 call. You should be assigned on the short call before the dividend. If so you will lose .02 plus commissions (vs buying the stock at $16.32). This trade was most likely done automatically by a market maker. While you saw a last of 16.32, he might...

Instead of rounding the numbers, tell us what stock and option you traded and the price and we will tell you the edge you gave up.

SPX Weekly options now stop trading at 3:00 ct on the day they expire. Previously they traded up until 3:15. The SPX continues to tick after 3:00 so this presents some risk that traders may not be able to cover. Also if you have some type of time spread on, you will be able to trade the...

You are right of course. Perhaps the OP got his terms confused. Unless of course he is trading boxes in the OEX, which have a huge profit loss potential (or boxes in hard to borrow stocks).

Would be helpful if you posted the stock name

When he says parity, he means selling the call with no premium to the underlying. For example if the stock is at 40, and you sold the 20 calls for 20, you would sell them at parity. The problem with this is if you are doing this because a stock is hard to short, you will be assigned on your...

Well said

You don't understand. I am not trying to be rude, but I am trying to get you to understand this concept. You think the MM wont exercise the 15 calls because all he has to gain is 3 cents? If he doesn't exercise he will lose 85 cents. He paid 85 cents over for the box. If he does nothing he...

Sorry, but this is completely wrong. It is meaningless where you sold those calls. It is part of a packaged spread. The individual prices you traded each option at DONT MATTER. When you are assigned on the calls, the short stock you have in their place is still a perfect hedge to the...

Edfor, believe me I hope you make money, but I want you to understand the risk. Your "risk" here is your short 15 calls, so as long as the stock is above 15 (not 24) you are facing a potential assignment and a forced buyback of your short stock. The only way you will make money here is 1) the...

Also, the most you could make on this trade is .75 so does this mean you sold 30 boxes? Based on where the reversal is trading you also gave up about a fair amount of edge as well.

You WILL be assigned on your short 15 calls. There is no short stock out there so MM's will exercise these to get long stock. There is much more risk in this position than you think do to your imminent assignment and potential buy in at an unknown price. This is a horrible trade, esspecially...

The main reason for this pricing is the stock is impossible to borrow. That is why the puts are so much higher than the calls. For anyone considering a play here, the WORST play is long the stock short calls. If you want this risk profile, short the puts instead.

I made this play for expiration day only. There has been a strong bias to the upside for the expiration day mark of the VIX. Thats why I played it this way today (long calls long SPY) Ended up taking most of the position off, leaving a few calls for a shot that I essentially have on for free...