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Well, until 2008 it was also unimaginable for a big investment bank to go bust, yet we all know how that ended. The point is that CFDs like swaps are OTC instruments and if the sh*t hits the fan your money goes into the liquidation pool. On the other hand, if you trade exchange-traded...

CFDs are ok until the firm you are trading with goes bust, then you can kiss your money good-bye! And let's not forget that the firm you are trading with takes the other side of all of your trades and they control the pricing...hmm...on second thought, they are all honest so you got nothing...

In order to make a profit you need to take on some risk, there is no way around this. Unless, of course, it is an arb and even then it's not entirely risk free.

Delta-neutral strategy makes money from volatility. E.g. if you are long volatility and it rises then you make money. And, yes, you do need to readjust to remain delta-neutral. The strategy is also known as gamma scalping.

Yes, you can get assigned. Just because an option is OTM based on the closing stock price doesn't mean that you won't get exercised, so the only way to be sure is to close out the option positions before the close.

Sorry mate, that's out of my league. :)

atticus is the resident expert on this stuff so hopefully he will drop by, otherwise, VIX options are priced off VIX futures so replicating them is pretty straight-forward.

It has nothing to do with the stocks being fungible. You have to look at the process behind it. Both IB and MF are clearers so essentially you are talking about transfering a stock between two clearing firms, which is possible, but I doubt anyone would go through the trouble of doing it for 100...

No. At least, it cannot be easily done.

You get the stock.

Options that are ITM by 0.01 at exiration are automatically exercised, so your plan is destined to fail.

Clarification: SPY options volume, open interest and bid/ask size should be divided by 10, while prices should be multiplied by 10.

Theta is the letter that denotes time decay. To calculate it use any of the option pricing models, such as Black Scholes.

OK, I had to ask though. SPX options are very liquid so I don't think you have to worry about moving the market. Don't forget that SPY is 1/10th the size the SPX, so everything you see in SPY should be divided by 10 to arrive at the comparable figures for SPX. The obvious drawback of SPX...

Are you familiar with Google? It takes about 5 seconds to type in "mutual fund" and get a wealth of information on them.

Let me start off by asking whether it was a live trade or a paper trade? The reason I ask is that many times people come here asking similar questions to yours and then after a couple of posts stating that it was a paper trade. The fact that you mention that you usually get filled at the mid...

The way you manage risk/size positions when trading options is pretty much the same as when trading stocks. The benefit of options is that you can use limited risk strategies, which allow you to size the position in a such a way so that the maximum loss on a strategy corresponds to your desired...

The Greeks do NOT put a price on options nor they affect it. The Greeks are just measures of sensitivity of a particular option to changes in variables that impact the price of an option.

This topic has already been discussed on these forums to death. Next time, before you start a thread, use the search button.

As you have correctly pointed out, getting the right volatility input is the key to getting a meaningful theoretical fair value. Unfortunately, that's the "$1mil question".