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Any strategy can be used by short-term traders, but the premium-selling methods I recommend is suited for investors with a time from of one to two months. Not too many strategies are introduced because it's a book for beginners. My emphasis is on CONSERVATIVE, risk-reducing methods. In...

It's called <b>The Rookie's Guide to Options</b> and is targeted to people who are first learning about options (although there is also some more advanced material included). I believe options make a great tool for investment clubs. The only problem occurs if an adjustment of some type is...

When trading OTM spreads, the option that is nearer to the money has the greater vega. Thus, both calls and puts contribute to being short vega when owning an iron condor. I suppose the put side contributes more vega due to the volatility skew, but that is also dependent on just how far OTM...

When you buy an iron condor you are short vega. It's easy to consider this a play to collect theta and hope that gamma doesn't hurt. But, the position is short vega and a spike in vega widens most spreads and an IV crunch narrows them. This is not a big deal unless you have a large...

Thanks YIP. You also. I take a peek here every morning, but as you said, not much going on. Maybe it will pick up again, but not likely. Mark

When buying iron condors, there are always two ways to look at the trade. First, when selling CTM (closer to the money) spreads the risk/reward ratio is better and the worst case scenario is better. When selling further OTM spreads, the risk/reward ratio is worse, the potential gain is...

You are right. It's worth a whole lot more than the 40% reduction. It's a life-saver. Please don't sell naked index options. Mark

RUT is European stye. RUT options stop trading on Thursday, one day before the 3rd Friday of the month. Settlement risk is present and the symbol is RLS. RUT has strikes every 10 points and tighter markets. It's also much more volatile. Mark

Wow. That's far too risky for me. Have you considered selling your expensive calls and buying some less expensive calls? That locks in your profit and still gives you a bullish play. Or you could sell out your long calls and sell a put spread, collecting a cash credit. Of course, that...

You are welcome. Too bad you didn't hold out another hour or two, but that's hindsight. In reality, minimizing losses is essential. Best, Mark

OEX is fine to trade, but if you ever sell options - even as part of a spread - then OEX is dangerous to trade. Why? Because OEX options are American style and that means you can be assigned an exercise notice before expiration. That is not a good thing for cash settled options. Much...

Hi YIP, First a couple of comments 1) With IV so high, this has not been a good time to open diagonal spreads. Because these spreads are long vega, the time to initiate them is when you believe IV is going to rise - or at least not fall. 2) Spreads that are 40-points wide are subject...

This is about the most absurd advice I have ever seen. Mech, I know you are smart enough not to attempt to adopt this method. Mark

Aaron. Welcome. Credit spreads are still king and iron condors allow you to play both sides of the market. As for the sale of credit spreads being a 'gamble,' owning stocks is a gamble also. When well managed, these spreads provide a far greater return. Keep reading. Mark

Thanks for heads-up. Last time I inquired, they said 'no'. Mark