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The collar might be something to consider for a good, large cap company with low volatility and good dividends like KO. You buy the underlying to capture the dividend. Then you buy the collar. Because of low volatility the options are cheap, so the cost of the collar will be minimal. You are not...

How much credit did you take for selling the spread? And what was the delta of the position? That is a good starting point to assess if the reward was worth the risk. You want very low delta, I.e very small chance of expiring in the money. I personally select 1$ wide strikes because I am...

If this is your first put spread, it is a little bit risky. The reason is that after the front month expires, you are left with a naked call. How about starting with more basic vertical spreads and normal calendar spreads? Limited risk,limited reward is a good way to start.

Look at the delta of the 115 put. That is your rough estimate of whether your option will be ITM at expiry. If you are ok with that probability, then you can buy the OTM put. As of now, the delta is ~.32, means approximately there is a 32% chance you will end up ITM and 68% chance that you...

Hmm..it seems quite a bit to pay 1$ for the OTM option...since they are so far OTM. Considering that IV is not that high, and the expiry is in the front month, I don't see how this option can have 1$ of time value? That should be the first question before figuring out what to buy? Is a very...

If max risk was 100, then the option needs to trade for 1$, not 100$. Also, you need to mention the current underlying price and the IV. Not possible to answer without that. At the very least, one is not necessarily smarter than the other. It depends on how much directional exposure and how much...

Thank you.

Thanks, yes you are right. I was thinking of us options. Can you elaborate why nobody wants ditm calls at par? is it true under all circumstances?

It depends on what your brokerage charges for: 1.exercise 2.stock trade commission 3.option trade commission 4.margin interest Also a point to note is: It is only profitable to exercise as opposed to closing an option when: The option is so deep in the money that there is almost 0 time value...

Ok I understand. I asked the question because most brokers except IB charge heavy fees for exercise/assignment. Just factor that into your profits.

You need to talk with your broker. If option is ITM by a certain amount (usually 0.01) by expiry, most brokers will auto exercise. Else, look around for a menu item that says 'Exercise'. You are right in that 'Buy/Sell to Close' will not exercise the option. Although, any reason why you want to...

Got it. Gatheral seems to be more for quants and modellers

I got it..your number is the total against all strikes and all expiration months...i was looking at a particular expiration.

Thank you

Let me check with my broker ...i am using questrade...i am in canada

Thanks for the list. GLD, EEM,GDX does not seem to have 50k contracts/day

Sure, will do. Thank you. I will check out gatheral. I have read some volcube articles. Seems like a decade before I can make any money. Thanks for your help.

Thanks. Which book by sinclair...option trading or volatility trading? I am reading 'trading option greeks' by dan passarelli. After that plan to take up charles cottle. My first attempt with charles cottles' book was not successful.

Let us say I sell a bear call vertical spread for .20 with the strikes a 1$ apart. So max profit =. 20 and Max loss is .80 Let us say the underlying moves down a bit and the value of the spread drops from .20 to .10 Is there a way to lock in at least some of these profits while still allowing...

Got it, thank you