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Aren't they short both puts and calls at same strike? If underlying stays around strike how do they know which side will/will not be assigned? You must have given them some smart ways to do things. Do they pay you royalties at least? PS: I assume that you can not say the name of the fund...

They may manage it by trading the underlying if necessary(negative gamma scalping). Unless the settlement is in cash, the difficult part from my point of view would rather be the pin risk.

I do it on etf stocks! It works well for me. I think it is too dangerous with stocks particularly if you were to do it on the eve of exipration. I have also thought to do it for the DOW (Trading expires on Thursday and outcome is based on Friday open), but I do not trust the opening prices and...

Great!

Good question. I do not know the answer. I did a quick check on the US patent/trademark office, and it appears that someone holds patents related to these pertual options, but I am not a 100% sure though.

Optioncoach is right. In addition, as I indicated in the other post, the cheap OTM options are very useful against margin changes in nonnormal market conditions. We know that options in such climate go to extremes in prices, and brokers change their margins. A naked position is likley to be...

Walt, I did not mean in my post to be negative. I rather want to say that you seem to have the right temperament and attitude to be successful in options trading. Continue to question everything (even if what you question is right) as this will strengthen your understanding and skills. An...

I would also add that they do not know how to manage money and risk. I have been giving a (though hypothetical) winning example to anyone new to trading I have known, and all of them failed it, because they do not realize the impact of money management.

Walt, I just read this thread, and many good comments were already made to your observations. I think your effort to find an "edge" is the right type of effort one should do. The "edge" does not require complicated things. Once you will find your key, it will be simple to explain and you will...

I know what you mean, but I think the reason is that people do not know why such things work. In your case you follow it probably because you know it worked for you (proof of the pudding is in the eating), but for someone else who does not see it the way you see it, he will never follow it...

Here is a dumb answer: both!

design and understand you own trading methods. If you are not disciplined it means that you do not understand your trading methods. "The heart has its own reason that the reason does not have"--your heart gets you in trouble when your reason does not understand everything it should.

It is going up on lower volume, and declining 200-days moving average. I checked the fundamentals in the past. They are good, but technically, that stock will not go far. Watch out for the descent as well!

I agree with you. I would add that experience in options trading, as well as specialization in the behaviour of the underlying help a lot. That is why I like to work only in certain indices (IWM is one of my favorites). Could you tell a bit more about how you manage B-flys? What I do not...

I won't buy till I see a new all time high, or two years after the all time high (roughly 20 months from today).

Usually when someone says something like Jeremy Grantham said, I would expect the exact opposite. The bear market will do exactly what all bear markets have done: Take in the order of 40% of equities out, and then head up (or at least stop moving down). "This time is different ..." has...

Spin: After my previous post I re-read what you wrote and maybe I am not understanding the position your proposed, or I am miscalculating what's in my mind. In my mind the short call in the covered call (call1) is below current stock price. The long call (call2) of the bull spread is above...

Sorry I misunderstood you. I thought that you were recommending a covered call only! and that you meanrt by CCS a covered call. I think I now understand what you mean (but maybe not). Now I understand that the covered call (which is a short put) and the long side of the bull call spread are...

It is a bear market. For 2 years I will not buy, unless a new high is made in the meanwhile.

I am sorry but I find this thread excellent! "Long term investing in stocks is not." is valid only for major indices (which drop stocks and include new ones). If you include all stocks past and present, I am convinced that stocks are a NEGATIVE sum game if we restrict things to the general...