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I did not understand from your answer if there is a better chance to get fills at the mid price on single orders vs. spread orders. Could you please elaborate on this? Thanks.

Is it reasonable to assume that it may be more difficult to get a fill on a spread order (such as vertical spread) at the mid price than to get a fill on a single order (i.e., call or put) at the mid price? I assume that spread orders are often executed by using implied pricing functionality...

If you want to invest in the stock on an unleveraged basis, and you wonder where you would get a better margin treatment (which means that you will have more cash for alternative use, such as purchasing fixed income securities) you would probably get it through options. For example, instead...

If a stock on which someone has a put is a hard to borrow stock, could there be a situation where the put owner cannot exercise his put? When exercising a put you own (assuming that you do not owning the stock prior to exercising) do you need to actually borrow the stock in order to short...

Hi, if you decide that you want to have an exposure to the underlying by using a covered call, which considerations do you take into account when deciding to use a covered call and not shorting a cash secured put (which gives the same payout ratio)? I know they are similar strategies but I am...

Thanks for the clarification.

Of course I did. The stock price drops on the ex-div date, but since the dividend was priced into the call in advance to reflect that drop, on the ex-div date the "drop" has already occurred and therefore the relevant dividend amount is not discounted anymore from the call price (and vice versa...

So it seems that the MM exploit an edge they have over public customers (such as being long and short the same position) that comes sometimes at the expense of public customers. For example, if the "true" open interest (before the MM start their play) is 200 contracts out of which only 20...

Why would market-makers agree to trade the DITM options back and forth between themselves? I do not understand what can they earn from such an operation. For example, let's say that the open interest for DITM call is 200 contracts out of which only 20 contracts are held by individuals that are...

IMO on the ex-date the call price will rise and the put price will drop, and this effect will be greater regarding DITM options (both puts and calls). Why do you think the call will drop and the put will rise? I think that ITM call owners tend to close prior to the ex-date since the dividend...

I assume you meant "...the dividend is worth more than the CALL value" (and not the put). Please correct me if I am wrong. Also, do the market-makers short the calls while simultaneously buying the stock (so it's basically DITM covered call)? In addition, what indication do the...

Hi, I noticed that sometimes the call options volume regarding ITM calls increases substantially in the day before the ex-dividend date. For example, on November 14, 2011, the day before MSFT's ex-date, the volume for the January 2012 15 call was 396,000 contracts. In general, when the...

Thanks for all the responses so far. In the CBOE's rulebook there is a rule that relates to the permissible price deviation from the option's theoretical price, so that if an option trade is within that range the trade will usually not be considered an obvious price error for bust purposes...

Could you please elaborate on how the conclusions of this paper may answer my questions?

Assuming that the two underlyings have the same volatility (they could be a 15-dollar stock and a 150-dollar stock, both of high quality and stable companies) should there be any difference in the options behaviour, other than the premium paid or the commissions involved?

Should there be any difference regarding implementing an options strategy on underlyings that have high prices (such as above $100) and underlyings that have low prices (such as below $10)? Given that all other parameters except for the underlying price are equal (such as volatility, time to...

I would appreciate any response, thanks.

In order to make sure that I understand your method, let's use a specific example. You bought SPY 124 Call @ 8.57 and sold SPY 125 Call @ 8.06, so your net debit was 0.51, when the SPY was at 121. A few months later, when the SPY was 112, you want to close only the short leg which is now...

Hi, If a broker goes bankrupt and thereafter the securities (not commodities) account is automatically transferred to another broker, and considering that the positions and the cash in this account are within SIPC coverage limits, is it possible that only part of the account will be...

Thanks for the responses. I asked the broker and I was told that the inaccuracy is only due to a technical error in the tax preparation software used by this broker, while the data that the broker reports to IRS is the accurate data and should not be affected by this technical error. I hope...