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Spin, why is it that you and a few others keep trying to argue with me and convince me that synthetics are better than collars? I have said more than once that I can't argue with you guys because I don't know that much about the synthetics. Matter of fact, as I get into it further I am...

Hi Don. Actually I don't know who the hell ends up with the interest that is paid. These past two days with AAPL have been a clinic for me on this subject. When the stock shot up beginning at noon on Tuesday, my Calls increased in value, and my short $85 Puts were likewise profitable. But...

Synthetic Butterflies??? Since becoming involved in these Boards I have read many postings where the author is quite sold on synthetic equivalencies. I'm still learning this concept, but quite intrigued. One of my long time favorite strategies is the Butterfly. Thus, I ask: Are there...

Don, regarding your last paragraph, let me provide further explanation. 1. You are correct in the first sentence. In my case, I have a significant balance in mutual funds, hence there is no concern about a margin call. 2. Regarding your second sentence, I appreciate your skepticism on...

Tower, generally, what strategies are these?

Tower, the last paragraph in your posting immediately above says, "As you may have guessed, I believe good stock or futures traders are magic while good options traders are simply utilizing highly repeatable techniques...kind of like the McDonalds of trading." You stated what you "believe"...

Interest Calculation on Shorted Stocks: 8 Ball and Others, I had promised an explanation of how the margin interest is charged when stocks are shorted. Actually, AAPL's $6 rise yesterday made this explanation quite simple. Look at my posting immediately prior to this one (page 15), where I...

Don, let me give you a not so hypothetical example. This morning you had a cash balance of $5,000. AAPL was at $86. You shorted 1,000 shares of AAPL at $86 and you receive $86,000. Now you have a cash balance of $91,000. Steve Jobs makes an announcement and the stock closes at $92...

Don, when you said, "If you short the stock then you receive margin interest, if you buy the stock you pay margin interest," I believe you have it backwards. You don't receive interest when you short the stock. You pay interest, and only if your Adjusted Cash Balance is less than the...

Spin or Don: Where is the carrying cost (other than the margin interest charge where applicable) when the stock is shorted? Bob

Since about 1 PM Eastern Time, AAPL has been on a wild roller coaster. Synthetic or not, for those of you on this wild ride, I sure hope you're strapped in and hedged. Bob

PCgeek, check with your broker and see if you would be allowed t o write "covered puts". Most brokers who allow covered call writing allow covered put writing. Covered Call Write: Purchase 100 shares of UNDerlying. Write (Sell to Open): 1 Call for every 100 shares of stock owned...

Don, once again I am in complete agreement with what you say. Bob

Don, thank you for the prompt response. I agree with you completely. That's why I prefer the Reverse Collar to the Regular Collar. So far, with my shorting stocks, I have not had any margin interest charges. On the subject of margin interest charges, I owe 8 Ball a detailed posting on...

Don, what do you mean by "cost of carry?" Regarding the risk graphs...trust me, there is no similarity. The vertical normally resembles a letter Z or N...not exactly but you guys know what I'm talking about. What I generally come up has curves similar to a straddle. Now, because I have...

All interesting comments. Thanks. MTE mentioned understanding my motives. Well, Coach who has been exchanging comments with me for years has me pretty well figured out and described very well where I'm coming from. No question that I have a preference for shorting stocks for starters...

8 Ball. What difference does it make whether one is the Natural and the other is the synthetic, unless they give frequent flyer miles for one or the other. Just kidding. 4Q

Daddy's Boy, I thank you very very much for your answer immediately above. For sure, I am going to learn quite a bit from you guys. I need to study and analyze your answer, which I will do for sure. One initial reaction I have though is that with AAPL being at 79, I'm not sure I would long...

YIP, how does one determine what the "equivalent vertical" is? 4Q

Daddy's Boy, if I misled you or anyone else in the beginning of this thread, I apologize. I'm about trying to make money and trying to help others also make money. I attempt this without any regards whatsoever for definitional boundaries.