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I'm pretty familiar with Cottle's writings and I'm pretty sure that nowhere does he say that a long call has a similar risk profile to long 100 shares of stock. As a matter of fact, the two are completely different risk propositions. One (the long call) has a limited risk profile in the debit...

You're kidding, right? If not then could you please explain how a long call equals a short put? I would be particularly keen to hear your explanantion of how they have the same risk profile since you say they are 'equivalencies'. db

I think the different quotes can be explained by the daily changes in iv and the b/a spread. Time decay is still fairly small since you've got the august options. db

Without knowing any of the details, it sounds as if you bought some cheap otm puts with not much time left to expiry. Iow time decay works against you and you probably paid too much when you bought them (wide bid ask spread?). Add to that a small drop in volatility (?) and you've got the reason...

I know precisely what you mean :). You have to understand that buying back the 85 call and then selling the 90 call is the same as buying a bull call spread. You then end up with the long stock and the short 90 call which is the same (synthetically) as a naked short put. db

Surely the most simple way to look at this is to determine the extrinsic value of the option (assuming no dividends are upcoming). If that is almost zero ( deep itm or near expiry or both) then there is significant risk of early exercise. db

Let's think for a minute about your proposal. You want to buy the july 85/90 call spread (this will be a debit). Ask yourself IF I had NO position on at all would I want to do this trade at the current price? My guess would be NO. If your answer is YES then go ahead and roll, otherwise just...

www.ivolatility.com

And very basic it is indeed. Thank you. db P.S. most people who offer their help don't usually start off with an insult.

Options 101. Big deal. However, you must be commended for your generosity in offering your help to those in need. db P.S. it's good to see that those free TOS seminars are paying off for you - TP would be proud.

I would guess that he's 'upset' because the stock was more bullish than he expected and would now like to continue to participate in the stock's upmove. One choice is to roll your short call up and out, preferably for even or a credit. This still leaves you with a synthetic naked short put. Is...

I always assumed that the 'correct' price was the premium that a buyer and a seller agreed on for the transaction to be consummated. Obviously each of the participants in the transaction thinks he/she is right in their point of view - those views being opposites in that one believes the security...

All right, I couldn't resist :). Using option basics, I can tell you now that you're going to make a lot more money from your far otm (read delta 5 or less) puts than your 25 delta puts assuming you allocate the same dollar value to each position. Why? Because you will be long a lot more...

You might try posting this question on www.riskdoctor.com and see what Charles has to say. The other option is to model this scenario and see which gives you the bigger bang for your buck. db

FGL. I've got an otm slightly bullish b2b calendar on. db

The position simply emulates that of a 'cheaper' long call. Why would you do it when you can just buy an outright call? That's probably why you've never seen this advised. db

Unfortunately they do come across with a pretty strong sales pitch and an overly optimistic attitude towards trading. db

Thanks, hope they've been of some help :) db

Hey chief, I just checked out your other posts on this forum and not a single one of them is contributing anything useful, they are mostly of a sarcastic or derogatory nature. Did you know that most posters on this site come here to learn something? So why don't you do us all a favour and be a...

Thanks for the advice but I actually trade with real money as well as working on improving my trading. How about you? Just like to post smart alec comments? Guess you've finished all your learning and know all there is to know :D Do you actually trade options or just wander around this forum...