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  1. E

    Writing Covered Puts

    MTE, if I may, I would like to expand a little bit on my response to you two postings above, in the second paragraph...where I spoke of the synthetic equivalent of a calendar spread. Another difference between this and the actual calendar is that the calendar requires an opening net debit...
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    Why do you trade options?

    Dave, like you, I'm really interested in seeing how the penny spreads and the new margin rules will impact future trading. Regarding the margin rules, I have a lot of thoughts and a lot of questions, but it is far too soon for me to express either. It is going to be interesting and as you...
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    Writing Covered Puts

    Ursa, you are the one who makes the personal attacks through the use of such terms as "ignorance". You won't find anywhere where I have resorted to those kind of personal put downs. My question regarding your use of the word "trolling" was a fair question. The only time I have heard it used...
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    Writing Covered Puts

    MTE, you're right if I were to stop right there. But, I don't. I wait until the stock moves, usually 1 strike price, then I adjust. The profit potential lies with the adjustments, not with just sitting on a present position. Also, using the combination where we presently are...that is...
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    Writing Covered Puts

    Rallymode, yes, it is possible that Optionetics is the first place I have heard those terms. However, I've been to a lot of broker sponsored educational seminars where the terms are commonly used. Not really sure where I first heard the terms though. Bob
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    Writing Covered Puts

    I have no idea what a conversion/reversal is, nor do I feel I have any need to know. Neither I nor Ursa knows what trolling is so he has asked me to look it up. I agree with Ursa that I am uneducated, particularly if uneducated means not having read the books that he is endorsing as the...
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    Writing Covered Puts

    Ursa, what do you mean by trolling? Trolling for what? Or is that something technical that I have yet to learn?
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    Writing Covered Puts

    Nikko, you said, "Conversions and reversals have no potential to make money based on changing extrinsic values." I must be doing something wrong because I am making money doing this. Perhaps when I learn what I am doing wrong I can stop making money. Bob
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    Writing Covered Puts

    Nikko, when one starts off short 800 shares, yes, it's bearish. It is negative 800 deltas. You're right that if you either buy 8 calls or sell 8 puts, it is still bearish. But, my point is that it is not as bearish. By doing either a or b, the negative 800 deltas is reduced to 400 negative...
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    Writing Covered Puts

    Speaking of intrinsic or extrinsic values, did you all know that if you have a collar or reverse collar with the strike prices of the puts and calls at the same amount, that the amount of the aggregate intrinsic value never changes? Example: Short 1,000 shares of UNDerlying. Long 10 calls...
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    Writing Covered Puts

    Intrinsic and Extrinsic Value Computations - Excel Spreadsheet With many of these convoluted combinations that I frequently find myself with, I often use an Excel spreadsheet to keep track of certain figures which are important to me. Many times I want to know both the intrinsic and...
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    Writing Covered Puts

    MTE, on January 17th you responded to me by saying, "Whether you short the stock and short the put or just short the call you are short the same amount of vega. So, IV has no impact on the choice of one over the other. But I'm sure you already know that and it was just a typo in your post." I...
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    Writing Covered Puts

    Hi Michael. No posting that relates to the subject under discussion is a waste of space. Regarding the Page 8 posting, my intention in that posting was to limit my comments to the narrow issue of balanced deltas and positive gammas. Just think, wouldn't positive gammas be wonderful if...
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    Writing Covered Puts

    Michael, No, I didn't say that. Go back to the first page of this thread. It was in a posting by Smilingsynic, in which he said that one of his favorites was shorting the stock and shorting two puts against it. I don't believe I ever said short 100 shares of the stock and buy two calls...
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    Writing Covered Puts

    Michael, for purposes of going ahead with this discussion, let's both agree that we are both people of above average intelligence, and that each has a solid knowledge and experience in trading both equities and options. Also, that we both fully understand the 4 basic options Greeks: Delta...
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    Writing Covered Puts

    Sorry Michael. No I was not jesting. Maybe I don't understand the overall concept of synthetics. As I read the various postings, the writer seems to try to convince the reader that alternative A is better than alternative B. Well if there is a material difference, is the synthetic...
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    Writing Covered Puts

    Michael, which is the synthetic side of the street and which is the natural side? Isn't the synthetic side of the street always the other side of the street? Bob
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    Writing Covered Puts

    Beltway, yes it does. I agree with you. Consider this: 1. Buy Calls 2. Short shares in an amount equal to the number of deltas created by #1. In previous postings in other threads I have had more than one dissenter concede that this is a gamma scalp. Let me come down from my...
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    Writing Covered Puts

    Ursa, you're right. I wasn't listening. I was reading. MTA said, "That's not the point. The point is that if I make a trade I wanna minimize my transaction costs so understanding synthetics allows me to do just that. Why fight a wide bid/ask spread on ITM options when I can achieve the same...
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    Writing Covered Puts

    Personal: No way. Weak: Probably because it matches the postings of a contrary nature. And you are correct, the ITM verticals can also become worthless, but long after the OTM's have completely lost their value. Annoying: Who cares?
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