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A short call at a higher strike and a long put and a lower strike is called a Collar. There's no way to setup a collar for a credit, unless you leg in.

Yes, you are correct, and SPX always settles like this.

Couldn't agree more, it doesn't matter whether it is a low IV stock or a high IV stock, options are priced accordingly so it is all proportional anyway. (i.e. higher IV = more expensive options = bigger move required. Lower IV = less expensive options = smaller move required)

I actually agree with Stock777. How do you define that you've been filled at the bid/ask? If you put in a buy order at the bid and then the market moves so that your bid becomes the best and only bid at that particular price then, technically speaking, you're no longer at the bid, your order...

If you know about the merger then you should also know that Nov options are adjusted (i.e. non-standard) options.

finance.yahoo.com for example, finance.yahoo.com/q/ks?s=GD

It is the day before the Ex-dividend date. For example, if the ex-dividend date is 8/23 then you need to buy the stock no later than 8/22 in order to be entitled to a dividend.

Actually, "the safest strategy" is a relative term. Almost any strategy can be as safe or as risky as you want/need it to be. The key is proper risk and trade management.

Yes, you're right, there's no margin requirement for a long calendar spread, the only requirement is the intial debit. You may want to ask IB about how they handle assignments, especially if you don't have enough capital to sustain the stock position. Generally, you'd have several...

Actually, you don't have to worry about your bonus. The hedger is hedging the overall firm's exposure, it has nothing to do with your exact position.

I agree. Wide bid-ask spread is a big handicap. Another variable that should not be forgotten is implied volatility. You can lose money with options with no movement in the stock.

www.redoption.com/glossary.php?byLetter=I&word=193

Fred, I agree with Equalizer, if you make 7-12% per month with IC's then why the hell would you even bother to do anything else!?:confused: 7-12% per month is 84-144% p.a. without compounding! :confused:

It's called Put-Call Parity.

maybe, it's because they don't want you to get in touch with them!?:D

No, Australia has capital gains tax, so although it sure is a good place to live, it is not a tax haven.

As it has been pointed out a number of times in this thread, the main problem is liquidity. Let's suppose for argument's sake that you run a fund with $1b. So assuming that your position sizing plan states that you can only risk 1% of that on any one trade (I'm oversimplifying, but it doesn't...

Actually, Open interest increases/decreases only in two cases. 1. If a buyer opens a new position and a seller opens a new position (open interest increases) 2. If a buyer is closing an existing position and a seller is closing an existing position (open interest decreases) That's it. In...

I don't calculate the monthly cost. Maybe I used the wrong words to make my point, but at the end of the day, a further out straddle is gonna tie up more capital and it is gonna be a lot slower than the front month so it is still hard to make any money on it from the earnings move.

Don't follow you!:confused: Could you clarify?