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They've been doing just that time and time again. Jul 24 Final Call: http://www.cnbc.com/id/15840232?video=1194823403&play=1 Mike recommends the CVX JAN10 60/75 risk reversal (short 75c, long 60p). Jun 26 Final Call: http://www.cnbc.com/id/15840232?video=1165772164&play=1 Danny...

CNBC's disclaimer notwithstanding, I can't see how the sponsor, thinkorswim, would be overly thrilled with the advocacy of these trades.

Aug 21 2009 "The Final Call": http://www.cnbc.com/id/15840232?video=1223085219&play=1 Anyone else find it questionable, from a risk perspective, that they are putting TV viewers into ratio put spreads, e.g. SPY 1x2 Dec 100/90p and selling naked calls, e.g. NSC Sep 50c? These may turn out...

buffett will be 79 on aug 30. hope you're long a downside wing. morbid, yes, but there's a implicit crash risk there that the market may not be pricing in.

True, but some commission structures have per-leg charges, e.g. TOS ex/rates.

Iron butterflies have 4 legs, the call vertical versus the put vertical, so commissions will likely be higher than the 3 legged equivalents, depending on your commission structure.

Worse. The OTMs trade on tighter markets, so they are preferable. An OTM butterfly is synthetically equivalent to an ITM using the opposite option class (call vs put) anyway.

you're bullish on EEM with a target of about 40 in a december timeframe. how about buying a 39/40/41 or 38/40/42 dec butterfly for an inexpensive, limited-risk, easy-to-manage trade with a very nice R:R?

I don't think TOS crosses orders internally like that. Spread orders are routed to one of the COB's (Complex Order Books), e.g. ISE or CBOE, and they sit there. The orders you see on the TOS platform are copies of those orders, but there's no internal order book from which you can directly...

don't sell credit spreads for 40:1 risk/reward. you must be correct with 97.5% certainty to have break-even expectation, excluding commissions.

We can set aside the separate debate about real customer demand versus structural (MM) demand. I do not dispute that, in the absence of any bid, there is no IV. No one disagrees with that. That does not imply your assertion, however, that "IV is demand." In the absence of oxygen, there...

Sophistry. I view demand as actual order flow -- real buying or selling pressure. Even in the absence of any order flow (demand), market makers are required to quote reasonable, two-sided markets. Those quotes imply vol. Your example of a of a 70 put on GS being zero bid is hardly proof...

IV is not just demand, as an option will have IV in the absence of any demand. The demand for an option does indeed affect its price (not surprisingly) and pricing models place that demand into IV. In other words, IV tends to be a universal dumping ground in some sense -- much of what is...

Kneale's bio states that he holds a journalism degree from the Univ of Florida. Wow that's some heavy duty economics background there.

the aug 20p/50c strangle is zero bid so selling it against nov yields nothing. the nov 20p/50c strangle looks to be 0 bid .15 ask, total open interest 27 (calls) and 30 (puts). if you want that action, just buy the nov strangle alone. vol crush won't hurt him as half nothing is still nothing.

Before you speculate on the Swine Flu, Bubonic Plague or the next meteor to strike the earth, go read a few books on options. "It is better to remain silent and be thought a fool, then to open one's mouth and remove all doubt."

You do not have to exercise the calls to realize the profit. You purchased the calls in the options market and you can turn around and sell them in the options market. With the stock at 75, the 60 calls are deeply in the money and will be worth about $15 (15k total). Leverage or "gearing" is...

For tighter bid/ask spreads, try trading the issues with penny increment options. On TOS, there's a built-in watchlist for penny increment options under the "Public" category.

My example was a sufficient condition for shorting synthetically without an uptick, not a necessary one. Depending on your trading style, you may find it easier to sell long stock off a conversion (or a bullet) in order to go short, rather than placing option orders, especially with the...

All in the spirit of constructive discussion. :) I can think of three other (possible retail) uses for C/R's, just to throw more gasoline onto this funeral pyre: 1) to isolate the speculation that a change in dividends is imminent. A rise in dividends will depress the calls and inflate...