Search results

Sorry to disagree, but unlike a business venture trading produces no worthwhile product or service. Thus when you have risk without any substantive achievement it's gotta be called gambling. Same like shooting dice. No product, no service, just gambling. Don

Click the "Brokers" tab at the top of this page and check out the number of reviews for each broker. You'll find IB by far has the greatest number of reviews. That kinda tells you which broker the Elite Trader community tends to use. One note, if you are talking about an IRA account IB may...

newbbee, Who would you go to as the "original source" for this question? Don

Yes I remember that GOOG debacle, but AH trading is not the basis for the closing price. I think the closing price is the last trade of the normal trading day. However the QQQQ normal day ends at 4:15, not 4:00 hence the basis of my question. I never found out the answer as I managed to unwind...

When is the QQQQ closing price effective, 4pm or 4:15 today? Pin risk high today. Don

One way to minimize adjustments is to place trades with low risk/reward ratios. For example a high R/R play might be selling an OTM NP. If the Put goes toward ATM the potential for high loss is great and that threat forces many adjustments. OTOH, a low R/R play like an ATM bear call...

Okay, sorry about assuming it was expiration day. Now I see where your going and it does seem to have some merit. My gut says that in practice it will be tough to do, but in theory it does look like it can work. Thanks for taking the time to explain it. Don

How can you trade the options after 4pm on expiration day (exp day was the premise of your original note)? If it's not expiration day, then you have an ordinary conversion with n days until expiration. Conversions are essentially delta neutral and don't make a profit when the underlying...

I don't see any advantage to your strategy. The puts should be exercised no matter what the market does after 4pm. Their value doesn't change after close, if they are in the money you should exercise them. So basically you just have some short naked futures contracts. I know you said...

How do you know they are not selling these calls? Don

Playing less than 10 contracts is no bargain either. I'm not a TOS customer, but paying a $9.95 minimum hurts if you do a lot of small lots. Don

CVDS, There ya'go, there is such a thing as option arbs. Let this be a lesson to you. Don P.S. Just kidding

Is arbing without options an absolute thing? Don

I would say you were dynamically hedging not arbitraging. I probably don't know the exact definition of each term, but I think of arbitraging as simultaneous setup of offsetting transactions resulting in zero risk with a locked profit. Your positions sounds like they had risk and needed...

I like options, but in-general I believe a lot more money is lost trading options than stocks. There are many reasons that more money is lost on options, but a big reason is that options are a zero sum game. For someone to win on options someone else must lose. Stocks, on the other hand, have...

Good analysis. Obviously, it's not a riskless trade. To give an example, using benysl's estimate for the two 1255 synthetic puts of 25 each he has effectively bought back his original 1255 short puts for 50 when his original credit was 11, loss of 39. Therefore, his remaining bear put...

Just to clarify, I don't think the max loss is 10 points. I think the max loss is 10 points plus the cost of the 1340 put minus the original credit (15.50). If I am correct above the same max loss calculation would apply to your item 2. And, adding to your list of risks, couldn't the max...

I suspect that the answer to your question is covered in the Characteristics and Risks of Standardized Options document published by the OCC. I scanned it quickly and found some applicable information below. However, it's a lengthy document with supplements, etc. So a more careful and complete...

Coach, It would be easier to translate music. Don P.S. If you are successful, we might discover Riskarb has been pulling our leg all these years.

Maybe, but most adjustments require buying and selling. So the question may be what is more liquid calls or puts. Maybe that question is best answered by looking at the open interest figures for the underlying. Also in my experience ITM contracts generally have wider B/A spreads than OTM. So...