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Thanks for the lesson in synthetics, lol. I think it's fairly obvious to most that a collar is a synthetic short bull put spread or long bull call spread, lol, and that a married put is a synthetic long call. My question wasn't about what a collar is but more about your opinion on why the book...

He/she's just had a bad trading day and is taking it out on the folk here - noone is attacking him/her, just self defence. I notice he/she stopped posting, probably because has gained insight into the error of his/her ways but is too embarrassed to come back and admit to it. Probably a nice...

I've heard from quite a large number of traders (many claiming to have made/are making good money using the strategy) that Lord's book on collars and dynamic hedging is excellent (albeit a little more expensive than your average options text). It's been described as a very practical...

Excuse me for interjecting, but prevail said the exact opposite - namely that selling options has negative expectancy. So, when someone claims that selling options has an 'edge' or 'positive expectancy' or whatever bullshit term is fashionable, it always starts an argument. That's what prevail...

Cool. Sounds like great value for money for those who don't already have modelling programs. daddy's boy

Out of curiosity, is the $70 a one off fee or an annual subscription? Sounds extremely cheap. daddy's boy

smilingsynch is right, your risk is double. Your new position is short the 140 and long the 120. Max risk is 140-120-credit=20-1/spread=19/spread, i.e. 1900x10=$19000 risk to make $1000. However, your roi stays the same, i.e. 1000/19000 x 100% ~ 5%. Best daddy's boy

The 'management' of IC's, as a rule, is to get out when your predetermined stops are hit since you are moving from an already poor rr to a worse rr. I presented some alternatives earlier to stimulate some discussion. Best daddy's boy

There are different ways of managing IC's. Generally speaking they don't have great risk/reward ratios - usually looking at 30% or worse return but the trade off is a high probability trade. Having said that, it's important you don't let them get out of control. One method you could use is to...

'Optiongear' (for australian market) and 'Platinum' (optionetics.com) for US market. daddy's boy

Thanks profitaker. Cheers daddy's boy

Hi profitaker I understand the need for vol input into the SD calculation and delta calculation. My question is really whether the two (SD and delta) are interchangable if I simply want to find the strike with a 68% (or better) probability of expiring otm. Cheers daddy's boy

I'm confused (again). I was under the impression that a delta of say, 32, would equal a 32 % probability of that option expiring itm. I also thought that a one standard deviation equates to a 68% probability of the underlying staying within that range til 'expiry'. Iow if I want to sell an...

You're right, I forgot to deduct the premium for the short sale :( .

I think you're both nice and very helpful. Cheers daddy's boy

Great, I've finally made it to the end of this most entertaining thread. So, what is the answer? Is it better to sell overpriced options or is it better to buy underpriced ones :confused: ? Don't forget, I'm only just learning to walk (baby steps), so take it easy on me :). What strategies do...

I've just been thinking: how on earth do you get your 11.4% return? Your max profit is the credit received for the call sale minus the difference between call strike and stock purchase price. You then take that figure and divide it by your stock purchase cost to get the return. This gives a...

Ok, I'll give it a shot. You're long the stock at 15.50 --- 100 stocks = $1550 You sell one ditm jan 08 7.50 leap call for 8.80 (or $880) b/e = 15.5 - 8.80 = 6.70 or $670 Max profit is $80 (7.50-6.70) for 1 leap covered call. Meanwhile you have tied up $1550 for 13 months at interest rate...

Same question as on OX boards :) Hopefully you'll get some better answers here. daddy's boy