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Understood. My question remains, would a broker typically force me to take delivery of shares on an ITM short put that is suddenly exercised EARLY if I also hold an ITM short put at a different strike? Or would a broker typically just net out the trade by simultaneously exercising my long put...

I understand direction. I am asking for specific details on the manner in which a broker might handle the assignment of an ITM short leg. Is it a function of whether or not the other leg is ITM?

Can you articulate the reason the short leg being ITM is more of a risk on a credit spread than a debit spread? Either can be assigned. I'm trying to understand exactly how these situations play out in the real world. Is assignment in a debit spread less onerous simply because of the way a...

Wait . . . the fog may be lifting. Is this all because the long leg of a debit spread is ITM whenever the short leg is ITM?

Thanks. I'm not sure I follow your answer, so let me clarify: I am OK with the trade going south; i.e., failing to correctly call direction. The winning trades in my system more than offset the losing trades when I stick to trading the underlying. (I know, I know. "Stick to trading the...

I am exploring the use of vertical spreads to make directional trades on stocks. I like their quantified risk/reward profile. Assume for the moment that my "risk management" will be limited to closing out the spread either the day before expiry or (perhaps) earlier if the underlying or spread...

So what you're saying is that it's fine to use market orders when it doesn't matter if you use market orders? :)

I would much rather not get my fill on entry than get a crappy fill which might affect my chance to exit profitably. I can't lose money on a trade I don't make.

If you're getting filled at the bid, instead of near the midpoint, then the effect on a trade can be substantial.

I'm quite familiar with the phenomenon -- I started on UseNet forums in the very early 1990's. I can understand cocky, boorish behavior on a sports site, but this is ostensibly a pretty high-intellect group of people. (Not that sports fans are necessarily low-intellect, but trash-talking is...

Honest question: why are there so many assholes around here? That was a completely unnecessary reply by FXforex (and childish, too).

Eh, it was your link and the language they used. Maverick, I trend trade part of my portfolio, typically looking for monthly prints to cross the 10-month SMA. It gets me short for most of the big drops. When the peak has passed but the trend is clearly down, have the puts typically already...

If long puts are "cheap" at market tops, that screams "don't short the underlying, buy the put", right?

THAT was a helpful article. Thanks! So when I see people say "spread the risk", they are presumably talking about the bull spread strategy. On FHN, if I go from the long Sep13 ATM call to the Sep13 ATM call vertical, I see these changes in Greeks: Delta: 70.32 -> 59.9 Gamma: 53.16 ->...

I might be a "bottom fisher", but my signals are pretty reliable on the underlying, including backtests. If such a system doesn't work with options, so be it. I won't keep beating my head against the wall. It almost feels like you're saying options prices and the underlying are out of...

Oh, sorry, I didn't get what you were saying. Sure. If I'm trend trading where I go from long to short on the SPY once every 4 years, then yeah, slippage is in the noise compared to P/L. I'm with you.

I guess it makes sense if the underlying moves up as time marches on?

Thanks so much for the input. I didn't realize slippage tightens over time -- that's not true for the underlying, I presume? There is no "time" component to long stock. My rationale for selling at the open and buying 20 minutes later was tied to a comment in this thread that volatility...

Still struggling. I placed the following trades in response to triggers generated by my system: 8/29 9:50 AM EDT Bought 20 FHN Nov13 $9 calls @ $2.34 (FHN @ $11.28) 9/06 9:30 AM EDT Sold 20 FHN Nov13 $9 calls @ $2.15 (FHN @ $11.30) Bought 20 minutes after the open, sold at the...

Two mistakes today: -- somehow double-entered a "sell to close" order on 5 calls. Ended up short. Bought 'em back at a loss and almost wiped out the previous gain. -- somehow entered a stop as a limit. Triggered immediately right after I bought the underlying to swing trade. Made...