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five point verticals up and down: +10 MAR 40 C -10 MAR 45 C +10 MAR 40 P -10 MAR 35 P max profit $950 on either side; max loss about $4000 @ 40; loss zone is 35.92 to 44.03 ten point verticals: +10 MAR 40 C -10 MAR 50 C +10 MAR 40 P -10 MAR 30 P raise the max profit to...

It's a put backspread with no upside profit, so I don't consider it a good trade. A put backspread with profit on both sides can be accomplished (much more simply) with all puts: -10 MAR 50 P +20 MAR 40 P This trade centers the maximum loss (-$7800) at 40, near the current stock price...

yes. ignoring the febs which have only 10 days left, mar is about 1700bp's over may on avg. wee.

arb, the short time spread came to mind, but the front months are so much more expensive than the backs, ripping your edge out. i'm standing aside. wee

it's maddening trying to wade through the news articles for legitimate FDA info on CETUXIMAB/ERBITUX, if that's the drug or treatment with news pending. all i see is "tears at martha's trial." i'm not interested in this one. too much baggage. wee

arb, i dont see that skew across the mar call series anymore. did they whack it out, or did you mean to buy _may_ and sell mar? may 40C are @ 67.9% iv, mar 50C @ 83.4%. maybe a diagonalized ratio? wee

Options prices are quoted per share, not per contract. The standard contract is for 100 shares which is 1 round lot of shares. One option contract quoted at $4 ask will indeed cost $400 plus commissions to purchase. 20 of them will cost $8,000 plus comms. wee

Thank you for the clarification, so in the end I could at least get most of my $5 back, even if I sell it after a couple days if the stock is trading at the same price? Yes, but note that the option wastes away faster as expiration approaches, not linearly throughout its lifetime. With about...

An option is a wasting asset whose value decays finally to max(0,stock price-strike price), in the case of calls. If you paid $5 for a 50 strike call on a stock trading at 48, the option is out of the money and the stock must rise above 55 by expiration in order for your option to be worth more...

Well, even a 5% move against you will knock 1/3 of your account out of the box (50 points @ $50/pt per contract @ 10 contracts is $25,000). Your size is way too large. Why are you using so much gearing? Anyone here will tell you it's a recipe for disaster. wee

I once had a boss that I respected a great deal back in my first job out of college. I came to him rather puzzled one day with a difficult work-related problem that I did not yet know how to solve. He told me this, and I never forgot it: "Don't come to me with a problem. Come to me with a...

thank god

when is the report, tomorrow? take the money riskarb and run.

re: price improvement: if some order flow broker improves the customer's price by a penny, i am sure he will put at least that much in his pocket and that the market is about to reverse on the hapless customer. internalization is the ultimate insiders game. where is the market? who knows...

ty mav..............and riskarb................

amen to that ;)

you guys happy about the BOX? i wish the options markets were more nasdaq-like -- allowing customers to display prices via participating ecn's that improve the NBBO. we could trade directly with each other like civilized men and women. i expect spreads may begin to narrow in any event as...

remind me again why xmas trees are better than simple ratios for neg vega plays, e.g. why is (e.g. all calls) buy 1 50, sell 1 55, sell 1 60 better than buy 1 50, sell 2 55's? ratios i like under certain circumstances, esp when i can put them on for zero debit or even a small credit (iv's need...

the only worry is the undercapitalized schmuck who puts on the same the trade out of respect for riskarb's ability and knowledge and then gets clobbered because he doesn't know how to manage it properly. i believe that element is the real risk when you read these boards. putting a trade on is...

btw, more and more physicians that i know in one way or another (thru personal acquaintence or personal illness) have left their practices to do other things. a good college friend of mine who is now a physician told me recently that, whenever a new patient walks through his door, he asks...