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Derivman, How is it not a zero sum game? Stop quoting "experts" and do your own thinking. I've now posted at least a half dozen times why options (and futures) are without a doubt a zero sum game unless you construct a false frame of reference. I've given many examples. Certainly your...

"Based on a CME study of expiring and exercised options covering a period of three years (1997, 1998, 1999), an average of 76.5% of all options held to expiration at the Chicago Mercantile Exchange expired worthless" This is the most telling that the source is CME. Most people do not want to...

As MTE said, options are always zero-sum. If they are not, you're either using the wrong frame of reference or including a non-option. You: Buy options A, B, C Bob: Sell option A, B Frank: Sell option C You make money on A & B, lose on C. Is this a zero sum system? Of course! Any...

IB's formula for computing margin is here: http://www.interactivebrokers.com/en/trading/marginRequirements/stockIndexOptions.php?ib_entity=llc You can reduce your margin requirements for short options in three ways: 1) Buy something against it (turn a short put into a very ITM put...

Nope

They're both zero sum. A total of $1000 is won and a total of $1000 is lost. In options and futures, there only exists a contract if two sides take opposite positions. As a result, there is a winner and a loser. In the stock market, the company is the only loser from selling its own stock...

Quote from Derivman: This is where many good sites say that market direction does not matter once you have the right strategies. Ouch. This is pure hype. In options, you have to have a correct opinion about 3 things: 1) Direction (Up, down, sideways) 2) Timing (How quickly will it move)...

Demand changes in commodities tend to have a VERY long term effect, or potentially none at all. Supply changes have short term effects, and potentially very large ones. 1) What kind of Coffee is China drinking? Robusta? Arabica? One futures contract trades at LIFFE, one at NYBOT. 2)...

Your interpretation would also mean that income tax is illegal and Social Security is only available to residents of Puerto Rico & other insular possessions. Interesting views, but not altogether realistic. Hey, what do I care--pay 40% premium on silver certificates to some guy who hopefully...

Read again. I said it is impossible for the US to default on their bonds. When you control both the money supply used to pay your bonds, and the bonds themselves, defaulting is impossible. You really think the US will stop paying interest in bonds rather than simply printing more money...

OH NO! Watch out--MB might fill your market orders at the market.

The Oats seasonality seems to be mostly a closing-positions-before-expiration artifact. In any case, it'll be interesting to see how it goes this year as commercials are incredibly short. They're not going to be in a hurry to buy up contracts the hedge funds are dumping. As for the soy meal...

The only way to know for sure is to try, anything else is just conjecture. One major difference between ES and US/TY is the number of ticks move in a day. 8 in US may be typical as opposed to maybe 50-70 on ES (ATR on ES is 1% ish?)?

That was supposed to read "buy deltas", "buy gamma".

First, you do not *realize* the profit when you sell puts, it's not even an unrealized profit. You took in some cash, but you have a debit in the form of a short put. The premium on the puts is less than the synthetic equivalent because you're synthetically paying interest on the cash. In...

I'm afraid not--you *must* have an opinion about volatility. You generally can't be right on 2 out of 3 and still make money. The exception is deep in the money calls or puts. With those, the time value is so low as to be almost meaningless. Selling the 95 puts seems like the worst choice...

You mixed two comments and attributed them to one person. I'm the TIPS guy. TIPS can never be "downgraded to junk". It's impossible for the US to default on their bonds. (Not that this helps you when you want to buy a Japanese TV, but it'll still buy pretty much the exact same groceries...

How are you measuring return? profit/risk? profit/amount invested? Instead of buying 100 shares of AAPL stock for a total of $9100, you could buy 80 calls, for something like $1200. AAPL pops to 100 and the options immediately expire. In the former case, you made 10%. In the latter, you made...

Yes, they are fungible. http://www.financialnews-us.com/index.cfm?page=ustradingtechnology&contentid=531054

My only experience is negative. If you're not willing to come inside on the bid or ask, you will not get filled until the move is over. The liquidity is just too deep. You're 4000th in line. :-)