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You're risking 90 to make 10. It is a high probability trade (~90%), but if you don't know what you're doing you will get killed on that 1 out of 10. Read thru Coach's SPX Credit Spread thread in the Journal. It goes though a lot of the why's and some of the why not's.

http://www.nyse.com/press/circuit_breakers.html

ANY option I BUY shows up in my platform with a negative theta. It's not exactly rare. I seem to recall a short, European-settled option might show a positive theta, but I've never seen it and may be way off.

At first glance I see the same thing. However, I can often get a fill off at the mid on SPY. I haven't had the same luck with SPX. Taking that into account the %return is pretty close. Granted the SPX is a little more liquid at the distant strikes, but it doesn't seem to help given the...

IB pays interest on cash above US$10K. And the rates get better the more cash. In fact, their rates are one of the better ones I've seen. Most brokers do pay interest on cash balances, although some don't pay much. Call the broker(s) and ask them or, better yet, send them an e-mail asking...

Instead of SPX you could try the SPY iron condor with $2 (or more) wide verticals. This cuts commission in half, and helps even things out, especially given the (usually) better fills on the SPY. The liquidity can become an issue for distant strikes, though.

yeah, I knew what you meant... ...just gigging ya. :D

I suspect TOS didn't tell you that verbatim. If they did I need to find out where that button is.....LOL.

I heard someone who put it interestingly a few weeks ago. New traders usually focus on making money. They should be learning how to stop losing money. Once they get that down the making money part will come. Ever so true in options.

I think you're debating slightly different viewpoints. What you're saying is true. At some point an individual option has one side that made money, and the other side that lost money. However, I think what archon is stating has a different twist. To give an example, you sell a put on a...

No argument there. But let's address your earlier statement in full, without conveniently discarding the "with the advantage leaning towards the seller.." part. If the option seller truly had an inherent advantage (like a casino) then just sell options and let the odds do their thing. The...

Yes, you are. Vega is the option premiums' sensitivity to changes in volatility (at the current volatility). Vega is a function of IV (among other things). Vega has nothing to do with IV being at 10%, 50%, or 100%. IV is based on the current option price, the strike, the stock price...

This has to be one of the most popular trading myths out there. This would imply that liquid options are inheritantly mispriced. There's been tons of debate here on ET on this topic already. Suffice it to say whether you buy or sell options doesn't make you successful - it's how well you trade.

Might want to check recent history. The S&P was off about 47% over a couple of years not too long ago. May never happen again, but... With options you can control how much you will loose so I would argue they are less risky, in competent hands, than an index fund. This is what drew me to...

That's part of what I've been cautioning against - simply forming an entity to encapsulate your trading may not fly with the IRS. I can't form an LLC, make two trades a year, and write off $10 grand in trading expenses and hope to get away with it year after year (a gross example, but I know...

Jessie has a good point above. It is certainly possible to garner trader status with a full-time job outside of trading (and something like an exchange membership is a huge plus in his example). However, the majority of part-time traders I run across think all they need to do to...

You don't need an LLC, an S-Corp, an X-Corp, a Y-Corp, or a Z-Corp to deduct your trading expenses as business expenses. You DO need to be a "trader in securities". The thread initiator worked a full-time job (assumed to be outside of trading). Given this it will be unlikely the IRS will...

Good synopsis.

I think that should be you're main concern. My first and best guess would be the IRS would consider your entity a tax avoidance scheme. But PLEASE talk to a tax attorney first, preferably one with securities/trading expertise.

Assuming you're a U.S.-based trader, it's very difficult to get trader status if you have a full-time job, and the resultant income, outside of trading. You can likely setup an entity, but you'll need a tax lawyer to tell you whether the IRS might consider it a tax avoidance scheme. Also...