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Huh? Don

LMAO Don

I'd be surprised if the cost of carry is the reason for the subject IV discrepancy. Are you sure that McMillan says that? The cost of carry is part of the pricing formulas and should not have to be fudged by the IV figure which sometimes is a catchall for many unknowns. For dividend paying...

I went back a couple of notes and now see what you are saying. Yes you can get a 6.88% annualized return on your collar, but only if WLP is higher than $75. If WLP is lower than 72.5 then your return is zero, but you have lost the risk free interest of about 5% that you could have made with...

Relative to your 1st play with the 6.88% return, what strike price did you use and what is the expiration date? My guess is that you might be overlooking the ITM amount of one of the contracts. That is, for a $75 strike "net income" would only be $2.56. Don

The OIC simulator is probably an accurate tool so my guess is that you doing something wrong. Are you sure you are using the correct IV figures? Don

Why do you think a different simulator is needed for the QQQQ or indicies in-general? I would think any american style option including the QQQQ could be handled by the same simulator (okay, maybe euro style contracts need a different simulator). Don

Is the market closed on Monday? I thought it was only closed on Tuesday? Don

Pub 550 should be the bible and I think it says "no" LT cap gains for short options. However, if the stock is assigned and held for a year then LT cap gains applies. Because the gain is calculated including the proceeds of the option then, in effect, the option proceeds get LT cap gains...

Although I don't trade futures I am under the impression that some brokers don't require a special account to trade futures. If that is true, than the stocks you own might provide the margin you need to trade futures assuming it was all in one account. Don

Do you mean that none got assigned at expiration? That would be pretty unusual. Don

No real conflict. Your "trading plan" could include fiddling depending on your new view. Many times my initial plan is to adjust depending on new conditions. Although with some defined limited loss positions, my plan says do nothing until expiration. Don

Nice chart and a good practical scenario. However the following is equivalent and probably more clearly depicts what is happening. Note I think the original chart should end with + 5 premiums. The equivalent is: 1) Sell Put, if not assigned +1 prem, else sell assigned stock then 2) Sell...

As long as you have the cash being assigned is no big deal. Of course, that cash is no longer earning the interest your broker pays so be sure to consider that in your P/L calculations. If the plan was to accept any assignment and then write CC's I would prefer to just write a NP rather than...

The further ITM your Put the more downside protection it provides for your shares. So a 360 Put provides less protection than a 380 Put. Therefore, the answer to your question is keep the 380 Put. If you thought Goog will rebound you might roll down as you suggested and keep some of the 380 Put...

Sorry, I found the problem. The contract I happened to choose was at expiration. Hence no time value and Delta would be one since it was slightly ITM. The formula seems to work well now. Thanks Don

I have a homegrown Excel spreadsheet that uses the B-S formula. When I use the Excel Normsdist function to calculate Delta it doesn't seem to work, I get either a one or zero. For example, the Normsdist of a near the money D1 with a value=19.63 returns 1. Any idea what is wrong...

Ya'know there is an argument that says people who buy any stock are crazy. After all why buy something that has no practical value? Oh yeah, somebody whose crazier might pay you more for the same worthless piece of paper. Does this sound like sane behavior? Now you know the real reason...

Actually there is a pretty good fundamental reason to say that options are more risky than stocks or futures. That is options are a zero sum game, for you to win another player must lose. While futures or stocks are like a pyramid scheme where everyone can win. I think this is a pretty strong...

I don't think anyone has a good answer for you. You have already mentioned some alternatives (multiple brokers, etc) and the associated drawbacks. Even with multiple brokers the Internet can go down and still give you grief. I would try and avoid legging out of combo's where possible using...