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It seems the problem is that you badly overpaid in an illiquid and panicky market. Let's use 5 days as time remaining in those options. Using your numbers, you paid 41.5% IV for the call. You sold it 3 hours later for 31.1%. That sale actually seems pretty good - but not enough to make up...

I'm delighted to hear it's helpful. Funny you should mention a book - many many years ago I thought of writing a book, as there were absolutely no good books on options available at the time. Then Shelly Natenberg - who was also in T-bond options at the time - came out with his book. It was...

Am I really that bad? And I thought I was ALWAYS reasonable! :) Really, I think the one time I really made a bold claim was when I mentioned the negative correlation between the SPX and the VIX. And I kind of did it purposely, as a challenge to myself and my theory, knowing it would bring...

Nitro, I don't think I ever said that if someone watches day in and day out he will never see an exception. But the exception does not disprove the rule - quite the contrary. It's true that this morning's correlation between the SPX and the VIX was the most unusual I've ever seen - I noticed...

A quick glance seems to show I'm still being charged too. I'll check in more detail in a little bit - but I'm sure I'm being charged. If I understood them correctly, interest begins accruing the day the short sale settles, so at the earliest it wouldn't stop accruing until the day the closing...

I use Hoadley a lot - it's become my go-to options analysis software. He provides tons of ready-made spreadsheets and applications, and if none of those do what I need I make my own spreadsheet using his option functions. I have nothing but good things to say about it - the guy's a maniac...

Just my opinion but based on your post I would just get out. You're clearly uncomfortable, don't feel you know what you're doing, don't have a clear reason for being in the trade, and don't have a plan. Classic recipe for disaster.

Good piece of trivia - never knew that. I knew if I stuck around here long enough I'd learn something worthwhile!

I finally got a reply from IB on this issue. Contrary to what I understood from their website, the borrowing rate is not locked in at settlement. It changes from day to day. The indicative rate attempts to approximate the actual rate you'll be charged that day, but may or may not be the...

IB provides a very easy way of finding out how many shares are available to borrow - Individuals>Trading>Shortable stocks. All they need to do is include the "indicative rate" when someone pulls up that info. They don't. They make you jump through hoops to get it. If you do jump through...

I don't think this was a hostile takeover - they wanted to be bailed out. A better question is: Why should you and I have to pay for these idiots' mismanagement? Especially since the execs of these companies - who were responsible for this mess - walked away with billions of dollars of...

Yes, under Broker Interest Paid there is an item labeled USD NET SHRT STK INT FOR AUG-2008. I think I'm paying about 21%, if I'm calculating it correctly. There have been no shares available to borrow for several days now, that's probably why it's now popped to 35%. Whatever our rate is, it...

Mighty sneaky outfit, this IB. If you dig deep into your account management, you will find that you have already paid interest on your short SHLD for August. Surprised? Didn't know that, did you! And how would you? IB didn't exactly go out of its way to warn you or even let you know...

I'm not sure this sheds any light Don - looks like they're all as confused on that thread as everyone else. Could you point out where you found the -35.5 indicative rate to borrow SHLD shares? And are you sure that means that out of nowhere that charge will appear on your statement? I...

To add to the above: The ease of covering your deltas with the underlying in futures has bred a different approach among futures options traders. When I was on the CBOT floor, the CBOE was right across the street and CBOE guys would often come over and check out our floor. Listening to someone...

In futures it's so easy to use the underlying to get delta neutral. You can short futures in any amount just as easily as go long. And buying or selling futures to get delta neutral will REDUCE your margin due to risk margining. Going short stock can be clumsy - you can run into...

You can see a reversal as buying the synthetic future at one price and selling the actual future at a higher price. Or buying the synthetic put at one price and selling the natural put at a higher price. Or buying the natural call at one price and selling the synthetic call at a higher price...

I've never heard of dual delta. But I'll hazard a guess. Delta is sometimes defined as how much the value of an option will change with a one-point move in the underlying. But if the underlying goes up a point, the option will change in value a different amount than if the underlying goes...

Could be calls or puts. Doesn't matter. The point is to think of it as buying or selling gammas @ IV. As an example, instead of thinking of it as buying 85 calls at 1.45, think of it as buying 85-strike gammas at 40% IV. If you can sell 86-strike gammas at 42% IV, then you have bought...

Yes, but what if there's huge volume, the price for the call swells - and a buyout is announced and the stock jumps 20%? Then it turns out that call wasn't so overpriced after all, was it? The only sure way to know an option is overpriced or underpriced is relative to other options at nearby...