Search results

I completely and emphatically disagree. If you want to get filled at the current market price, place a LIMIT order at the current market price. If you really want to be sure of a fill, place a "generous" limit order by bidding more or asking less than NBBO. If you place a market order, you...

I'm not sure I understand. How can you get an opening order filled for a loss? If you place a limit order, you should be filled at your limit price or better, or not filled at all. If you get a worse fill than your limit price, call your broker and insist they make up the difference.

I think you missed my point. It is very easy to sell options, have 70% of your writes profit, and still lose money. The idea is not to merely have higher probability of profitable trades, but to have more profit from the profitable trades than you have loss from the losing trades. When...

There are two outs. You can be out of the money, or you can be out of money.

You should have kept reading. Later on that same page you linked: Besides, winning 70% of the time still doesn't guarantee you a profit. We trade for cash, not for winning percentage.

What on earth could bring anybody to make a ridiculous statement like that?

What I'm saying is that you can't trade a bunch of options randomly and rely on bare probabilities to make your money. You have to do whatever you can to increase your odds. The thing is, with directional plays you can never really improve your risk/reward ratio too much by combining...

Casinos do even better with thinner margins and higher payouts. But they (both counters and casinos) place enough bets that their returns converge to the mean. Also, they both need a lot of liquidity to ride out deviations from the mean. You get a few bets a month, and you have to make them...

I think we need to distinguish between option positions that are statistically high-probability trades per se (e.g. DOTM writes and spreads, wide condors) and trades that are structured to be high-probability based on your outlook for the stock (e.g. strike selection for butterflies, condors and...

Delta is the probability that a particular option will expire ITM. Once you know your break-even point for a position, you can use the imaginary delta at that price to calculate the probability of break-even or better/worse. For example, suppose you write a 55-60 vertical bull spread. Your...

If the options are a month or two apart with similar IV, any IV contraction should hit them similarly. The calendar is not usually an IV play unless you open it when there is a skew between months. Though I'm willing to be corrected on this point. Where IV contraction will hurt you is at...

I've dabbled in calendars, haven't traded them much. Like any other combination with a short leg, the calendar is a bet on the short leg expiring at the money. In particular, as long as your short legs keep expiring ATM you can roll out to the next month for maximum credit. The position...

If you have a better intuitive feel for one equivalent over another, that is a perfectly valid reason to prefer to trade it. The last thing you want to do is make the wrong adjustment because of some mental hiccup while dealing with a new type of position.

I'm not sure what exactly you're missing, but I can tell you for sure that a Jan 270 call won't give you a positive return on a stock that "goes ballistic" up to 190 in mid-January. That option will have a week left to trade, and it definitely won't have more time premium than it does now. A...

I'm not sure what that sentence means exactly, but if you're assuming the price of AAPL will go to 190 and comparing the theoretical returns of long calls at all those strikes, there will be one strike somewhere in the middle that has the greatest percent return. If you take a very low...

If you can explain to your broker why what you've been doing is equivalent to what you'd like to do, and you've been doing it for a while, that will probably show enough options expertise for your broker to up your permissions. If not, you can always change brokers. Especially if your broker...

I think it's a quirk of your software. Unless an adjustment is such that it completely closes a leg of your position, I wouldn't be booking profit or loss until your whole position is closed. You can follow the net value of the position as it progresses to track your progress, but don't count...

The fact that about 255 plus about 1524 equals about 1770 suggests to me that your software may have counted the $255 as realized when you adjusted the position and chosen a new starting point at the time of the adjustment.

I and others have had bad experiences with Yahoo option quotes. I would not rely on their data. You can get free and reliable delayed option quotes from the CBOE and OX websites.

Oh, this? "I don't care which you trade because they're all priced fairly + risk premium for me." There is no + risk premium for you. The options are either fairly priced or not. If you add a risk premium to the price, we can choose to sell to you at that price. If you take off a risk...