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I would strongly recommend against increasenow's idea of just paying the ask when buying or settling for the bid when selling. You will almost always pay more than you need to, which wastes your hard earned money. The simple solution is to do the following: When buying, start by bidding...

IMHO, options are much more complex than stocks, probably by an order of magnitude or more, simply because for every stock that has options listed for it, there are a multitude of options available with different "types" (calls and puts), strikes, and time frames. The possibilities are...

No, your strategy won't work. Part #2 won't be allowed. In order to sell naked puts (which is a risky practice), you need margin. If your account falls to 0, your margin is really easy to calculate. It will equal 0, and you'll be out of business. Stock margin and option margin operate...

Good discussion. Comment 1: Greeks give you interesting and sometimes valuable information about you position. Why not use them? If you have a decent broker, you will have it all at your fingertips anyway without a vast amount of effort. Ignorance is NOT bliss. Comment2: Greeks are...

Cash Profits-- here's my two cents worth. Your concerns are reasonable, but the rules won't change. Brokers generally want protection, and many of them barely understand the options business. (There are only about 4-5 brokers who really know how to do retail options well) So... Save up...

spindr0--- The great irony of your comment is that the market being down 38% IS probably only TEMPORARY, but the losses to people's accounts, well, that's another story!!!

Two quick comments... quote from Mark: "This setup was not chosen at random. The founding fathers knew what they were doing and there is no chance this will ever be changed. Besides it provides another opportunity for some to manipulate the market, and those who can do that will never give...

rluser, In response to your question, I did some investigation on the internet in order to determine just how the RUT is "ordinarily" calculated. Unfortunately, my search wasn't as useful as I would have liked. There is plenty of information put out by Russel Investments (the company that...

MTE, thanks once again for your investigative work. I think it is extremely useful to have solid empirical data informing opinion. Let\s look closely and see what it means. Here's my take... As MTE pointed out, most months the difference between open and RLS is not large, so you would...

MTE, thanks for your work on this. Is it possible for you to compare the Friday open with the settlement value? I know that Yahoo has the data for the opens. This would give a clearer picture of the effectiveness of using a futures strategy on the RUT. The more that I think about this...

You're getting good advice from all of the above. I really like Dan Sheridan's little saying which goes somewhat like this: Make plans in times of peace, not in times of war. This means before you initiate the spread, you should know when and how you will adjust based on how the situation...

Thanks, Mark. Purchasing a 520 call is a very good idea. Occasionally, it might even be a better plan than closing the spread, depending on the prices involved. It certainly eliminates the risk of losing the majority of the profit on the spread, without the sleep aggravation.

I actually went to the trouble of calculating the difference between the open for the RUT and the RLS (the settlement price) for the last six months just to be completely fair with Mark and MTE, who I both respect. Here is what I found: Expiry Date __ Open ___ RLS ____ Difference...

Mark-- I'm pretty disappointed in your reply, frankly. This is NOT a case of calling a put a call or a radical error in judgment and does not deserve the kind of reaction you responded with. I'm definitely NOT a rookie trader, and you should know that already since I have participated in...

As of the minute I am writing this the RUT is at 517. That is only three points away from the critical 520 mark. As MTE and Mark correctly pointed out, the opening prices tomorrow (what is called the opening print calculated by the exchange) are the critical factor that determines how much you...

BiLo It's NOT Lake Louise, but it's just over the mountain from it. It's called the Valley of the Ten Peaks. In my humble opinion, it's the most beautiful place in North America. It's also clean, relatively quiet, and pristine. There is a gorgeous hiking trail. The view from the 11th...

Thanks svg. By the way, welcome to the options board. I'm looking forward to your insights. Mike-- I totally agree with your post on fills, and take the similar approach. When I really want a fill during an adjustment, I offer 0.10 off the mid on a spread (0.15 for butterflies) and it...

Svg-- his spreads are definitely not too wide. A 10 point spread in SPX is perfectly appropriate. Spreads in the SPX can easily be as wide as 20 or 25 points and function very well. In fact, with the SPX boys in Chicago and their quirky fills (see rickf above), it's usually better to be a...

Actually, he is referring to a complete Black Swan situation where the market collapses. In that case, the spreads WILL actually be profitable. As I explained above, I would do something quite different because I would much rather have protection above the spread which is several times more...

I think that the puts that you are thinking about are way too far away to do you any good under 99.5%+ of any situations you may encounter. I suggest that you try the following: buy a debit spread of the 700-685 in the same amounts as your credit put spread (if you sold 5 spreads of the...