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Depends on a variety of things: 1) How much time value remains? If it's only a few cents, the odds of an early exercise is much higher. 2) Is there a dividend upcoming? If so, you're much more likely to be assigned right after the dividend occurs (for puts) or right before (for calls). 3)...

No. A 50% increase in vol will affect both the put and the call. The vega is neutral. If this were not true, think about the conversions you could put on for a credit.

Quote from jllm03: 5. The company is expecting Fast Track approval from the FDA. Yeah, so was POZN. 12. Option Volatility is extremely high and points to $20+ over the next few months. This argument makes no sense. That's like saying, "Because people are uncertain, it must be going...

No, as long as you get a good fill. http://en.wikipedia.org/wiki/Put-call_parity

Delta is .70-ish on the leap? I'd be worried about 2 things in this situation: 1) The stock dropping to a few bucks due to failure of their phase 3 trials. 2) The volatility getting sucked out. Once the phase 3 results are known, the leap's IV may drop to the 20-30% range. That's...

You're asking for trouble. When the front month has an IV of 170-180%, and a later month (just Mar '07, even) has an IV of 100%, there's obviously going to be a huge announcement to make or break the company soon. I traded a similar calendar spread on POZN last June. I managed to get some of...

Unless, of course, there's an unexpected dividend, stock-for-stock aquisition, or something else odd that happens. In that case, your synthetic long may be muuch more risky than a real long. In any situation where put-call parity is broken, you're in trouble. Fortunately, those situations are...

I too would be interested in any good news sources on ags in general. CBOT produces a 3x daily report from the floor that has a variety of interesting news. http://www.cbot.com/cbot/pub/page/0,3181,1033,00.html I also tivo "This Week in Agribusiness" on RFDTV (and skip the 5x per...

As I posted earlier, a decent bid may be unfilled for 15+ minutes. What does a "market order" mean when there isn't a current bid and ask?

I asked a question about the lumber pit a month or so ago. I was told the running joke is that when the phone rings with an order, the locals all laugh. It's true. I've gotten some *HORRIBLE* fills from the lumber pit. Really... Really... bad. The market reporter will report a decent bid...

The biggest single day move I've seen in beta is .05. Generally that's within my "slop" size before I make adjustments. Coming up with the slop size is hard. Same with a gamma negative, delta-neutral position. How far does delta go before you "fix it"? I've made up some rules of thumb, but...

This is a really good point. I spent some time switching all of my beta weighting to NDX (since I'm generally trading nasdaq stocks). I found it to be a tradeoff (like all things in trading). I briefly dabbled with beta-weighting against the appropriate index (NDX for tech stocks, SPX for large...

In my case, beta is always measured against the S&P. Although that's simplistic, it's easier for hedging purposes (and has worked reasonably well for the last few years). Beta can't really be "unreliable", it's just a statistical measurement, not a predictor. In my case, it's based on the...

Quote from Profitaker: My main strategy is selling front month options, so the vega risk is of much less concern (to me) than Gamma. Remind me not to trade wheat ! Ha! Who figured wheat would hit 10+ year highs in just a few weeks. It looked oh-so-stable when I got in. :-) Gamma is...

That's just WAAAAAY oversimplified. Convexity is one risk to be managed, but hardly "everything". Frankly, delta is extremely important to me. I continually compute the cumulative delta and beta-adjusted delta of my entire equity option portfolio. If I'm too loaded up on delta positive...

I wish I had some idea what this means. If they aren't tracking a reasonable model of pricing, then it's an opportunity.

FWIW, I tried practically all of them, and ended up writing one for myself. Optionvue was probably the closest to what I wanted, but the complexity and nickle-and-diming of all of the "packages" and "add-ons" were too frustrating (and extremely expensive) for me to mess with. If you want to...

Many places require you to be "approved" to sell options on margin. Also, if you're trading a 401k account, you cannot sell options on margin at all. IB does not have any special approval--either you have a margin account or you don't. To the OP: IB has a page where you can compute the...

So far, spreads seem worse to me. QQQQ options that usually had a .05 bid/ask spread are now at .08. I've not actually traded any yet, so maybe there's a better chance of getting hit in the middle of the spread?

What is an "option prospect"? If you're looking for a stock that's going to move in price, then use the typical technical/fundamental tools that you'd use for any underlying. If it's a volatility move, IB has a variety of volatility scanners for equity options as does Optionetics for futures...