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What makes you say covered calls are ITM? Most people I know sell an OTM call against the stock, giving a little room for upside while simultaneously reducing risk. The buy-write ETFs indicate that this is a better strategy, too.

Kevin, if you box a profitable vertical and hold to expiry, does it gain value over that time frame? The original spread (assume both legs ITM) should be gaining value, but the second spread would by definition be OTM and losing value, right? Do they wash out? If so, does that make unwinding...

Uh, what? The market was up big today.

But he said the VIX tracks the VIX futures?

Can you expand on that? I thought the VIX was reflective of a weighted blend of SPX option prices.

And to piggyback even further, there's more to it than delta. 3X options with 0.25 delta won't necessarily behave the same as 1X option with 0.75 delta. Assuming both options have the same vega, then your volatility exposure will be 3X higher with the 3X option trade (as well as augmented...

I've been doing this for years, and it feels like today was an outlier. VIX tracked the market almost perfectly. It climbed like a mother as the index climbed and then both peaked just before 1 PM ET, plummeting from there. I can understand the argument that VIX spiked as S&P spiked "too...

Your ROI will be larger with an option . . . if you're correct. Your LOI will be larger with an option . . . if you're incorrect. To me, the advantages in options are (at least) two-fold: 1. you can construct more elaborate P/L instruments due to their "nonlinearity". 2. you can use your...

I don't know if you're a troll or not, but consider the following: say that $108 put costs you $12. You just paid $12 to sell your $98 stock for $108. You're $2 in the hole. Just sell the stock (or keep the put in case the stock dumps and the put value goes up, hedging the downward price...

Can you define "swing power"? Is it a quantitative metric or merely a descriptive term?

Today is one of those days . . . the VIX and the S&P 500 seem to be tracking very closely. While rare, I've seen it happen before. What is the meaning of this? Ordinarily, the VIX drops when the S&P climbs, but not always. Are there any studies I could read that discuss what might be...

Good stuff, thanks to all. I'll look into these.

This is probably not a strict TA question, but I'm not sure where to ask it: what characteristic(s) would you use to describe a stock that (historically) traverses a high percent price range? In other words, over a specific time period, how would one numerically assess a stock's "covered...

I daytrade a specific ETF and typically wait until a couple of hours after the open to jump in. I mostly trade long ATM calls. My entry timing is set up by simple TA but I look at price action (holding at support, clearing resistance, etc.) to enter. My biggest problem is usually too much...

My thoughts, for what they're worth: 1. B/A spread can be tough to deal with on ITM options. 2. for a trader whose account has a required settling time, it can be advantageous to trade options instead of the underlying, due to reduced capital requirements (long options)

Without advocating for the strategy, there are obvious differences between selling puts and just going long on the underlying. I'm not saying the risk:reward math works out a lot different, but on a per-trade basis the idea of selling OTM puts will (by definition) lead to more winners than just...

Can anyone point to a reliable source of weekly or monthly data for SVXY? Proshares website says the inception date was 10/3/2011 but Yahoo! Finance data only goes back to 2014. I can get the daily performance from ProShares but converting that to weekly or monthly data is a pain I'd rather...

For starters, you don't "buy" a credit spread. That said, you can ponder the idea of reducing risk by legging into spreads until the cows come home, but in the end, you will discover that you put on a directional trade at the jump and that it is quite possible, should you be lucky enough to...

Understood.

I'm seeing a $10 spread on the call side. Regardless, I'm not sure I understand what you're saying on (3). Are you talking about a spike in price up or down? I assume BTDT is "buy the damn dip" (but maybe not because that would be BTDD). Can you clarify?