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Nah...put_master never has to buy options. He just sells nickel puts to his heart's content and makes impressive annualized returns. But there is no risk because the puts are: A. out of the money B. on "strong companies you wouldn't mind owning" Just HOPE your company doesn't miss earnings...

Lolol... I read the other thread and I think Twinsen is a few levels from discussing box arbitrage. Twinsen - before atticus beats you to a pulp you need to brush up on your terminology: http://www.investopedia.com/terms/s/strangle.asp http://www.investopedia.com/terms/s/straddle.asp

If the shorts move against me my plan is to do nothing. That's another reason I add the extra long straddle. Movement will kill a long calendar, so the extra long straddle offsets some of this.

Agreed and I'm not selling that three-cent call. If I want to sell the 29 call I would use the monthly.

I want to be long vol on silver with a longer time horizon (ie not a quick vol trade). And I'm trying not to get killed by the theta while I wait for a vol bounce. Is there a better method?

Thanks for the comments atticus. - SLV is at $28. The Mar22 28 call is 0.24. The Apr19 28 call is 0.64. - non linear The Mar22 29 call is 0.03. The Apr19 29 call is 0.27. - reverse non-linear (my own term) - "You've flattened gamma but theta as well (at 3/2). It's essentially isolated to...

I've been playing around with a similar strategy lately. Can't really offer 'advice' since I'm still learning as well, but some thoughts: - I buy the longterm straddle and sell front month options against it like you. But I add an extra long straddle to increase the long vol exposure and...

With no change in stock price or IV, the scenario you are looking for will never happen. In other words, after 100 days your $2.60 put will never be $0.30. It will be more like $1.30. Because the most decay occurs as we near expiration, your "return on capital" will always be highest right...

- $11 on a $540 stock is not "well in the money". It's 2% in the money. - What happens if AAPL falls to $300? What will your arbitrage profit be then?

Ya the author does a lot of work with Option Insider too so makes sense.

http://www.optionpit.com/blog/paying-price-pcln

In the money debit spreads are short vega.

Can't help you with the jobs report, but you are confusing intrinsic value with time value. Intrinsic is a "constant" value = stock price - strike price (calls) or strike price - stock price (puts). IV has no effect on an option's intrinsic value. IV is represented in the time value of an...

Atticus do you mind elaborating here? I'm a strangle/straddle seller so this interests me. Why the strangle over straddle? Skew? Also why "outside the straddle range"? Thanks.

You were likely reading something about "equivalent positions". In options there are different strategies that produce the same risk-reward profiles, these are called equivalent positions. Example: - Long 100 shares of stock + short call = short put This does not mean that stock, calls...

I think you are getting confused by short vs. long. Calls and Puts are either in the money or out of the money. Makes no difference if you are short or long. A call is in the money if the stock price is HIGHER than the call strike price. A put is in the money if the stock price is LOWER than...

An iron condor is selling an OTM call spread and an OTM put spread. To answer your question I'll just focus on the call side. Example: - Stock is at $100. - You sell a 105 call and buy a 110 call. - You receive a credit (let's say $2). Expiration Scenarios: - Stock is lower than $105...

False. The correct version is: Man who sell premium with too much leverage, buy K-Y Jelly one day.

- What you are describing here is a "short straddle", where you sell equal number of calls and puts at the same strike price. I sell these every month but unfortunately it is not free money and I am not yet retired. - Your risk is that the underlying moves more than the total option premiums...

I don't know the answer since I don't really use any screeners...BUT...You might want to rephrase or elaborate on your question. You can do a short strangle strategy on any stock with an options market, so answer to question #1 would be "all of them" or "thousands of them". I assume you...