Search results

Wow, I learned something today. Thanks.

Fascinating, the 30-day atm prices I was looking at happened to fall on an ex-dividend date. So, that's why the puts and calls were not at parity. If you're opening your trade by selling at any given price and checking for call/put parity, which is what the CBOE study was addressing, you...

I'm usually rolling buy-writes and short puts or spreads on the SPY and QQQ. At times I get stuck with partial fills that meet my limit orders. I'm wondering if I added all-or-none conditions to the order, if I would get poorer fills while I'm middling the market. Intuitively I'd say yes, but...

Interesting, shorter term ATM SPY calls and puts trade at parity. OTM prices show the put skew and 30 day ATM pricing shows a put skew.

CBOE took a look at why their cash reserved put index indicated that put writing achieved greater returns than their buy-write index. They found that most of the "excess return" was attributed to the modeling assumptions used to roll the contracts (SOQ to VWAP). In my own experience...

-- Or, you could buy a put, buy the stock and sell an OTM call. But, the numbers won't add up for a retail trader. And, the time premium for puts will increase as the underlying approaches ex-dividend. -- Yes, the dividend is offset by the markdown of the underlying; so, there's no point in...

Yes, somehow I missed that.

Me.

SPY and QQQ for sure. If you want high volatility IWM and USO. If you want lower volatility GLD and TLT.

I personally don't like the idea of selling short-term calls against LEAPS. But, I've honestly never tried to buy a warrant and then sell a LEAP. So, I can't say if the idea has merit or not. If you have some specifics, that would help. Ignoring the math, here's some things I'd question, if I...

Why do you want to use LEAPS and Warrants? Why not just do conventional diagonals, if that's what you're trying to do?

As a newbie trader my biggest mistake was overleveraging credit spreads.

It makes you wonder how it would work if it were a spread. You're assigned on the short contract and can't get the underlying, and probably can't get the underlying if you exercise your long call. If that assignee didn't have shares, would the short obligation stay with you or be transferred to...

Then it seems like you have a plan.

Liquidity issues and the time to expiration aside, if you want to get out of the stock when it hits the strike, the idea might be OK. Now that the trade is on, do you plan to roll the option with the market, let it go through assignment if it passes the strike, or plan to roll the trade at...

That hits the nail on the head. That's when you know you're a pro.

I think I see what you're getting at. Usually when options positions are explained the P&L curve at expiration is what is used discussed. And, I agree, management of the position is often not fully discussed.

If your trading covered calls and cash secured puts, you're pretty indifferent about whether you close them before expiration or let them go through assignment. Though I'd imagine most people would tend to roll the contracts, or maybe not. The point is that you can do it either way. When you're...

Well, you were trying to create a diagonal spread that has a P&L curve similar to a covered call, and you've done that. And, probably when you're thinking about covered calls you're concerned about delta and theta of the short contract. Which is good. With Diagonals, and because you've got such...