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No. I don't roll unless forced to do so (short strike breached). I merely carry positions in two different expiration months at once. For example, I filled my quotient of Oct/Nov spreads 2-3 weeks ago, using half the capital I devote to diagonals. This past week, I began opening...

It's much easier to get decent premium when expiration is about 7-8 weeks away. With only 5, it's much more difficult. Good luck. Mark

In all my years as a CBOE market maker, I was never FORCED to bust a trade. We did it when we felt it was really an error. Things may be different today. Mark

Here's how it works: The broker asks the party (or parties) on the other sdie of the trade if they would be willing to let the customer (who made an error) out of the trade. Sometimes they do, sometimes they don't. But, I have never heard of a broker who would take the trade just to let a...

Here's another perspective: I've already opened all my Nov/Oct diagonals and am about halfway filled on my Dec/Novs. Mark

Suggestion: $520 credit is too large to allow it to get away. Do something. If bullish, then the Oct 760 may scare you into taking your profit now. If not too bullish, then rolling to Oct 760 is a good idea. Just do something. Mark

I get it. Any terrorists considering an attack would check the timing of such an attack with the market makers first - beause they wouldn't want to upset them. Mark

I agree 100% with that phiosophy. But... Sure we play VEGA, but in the real world it's so tempting to wait just a few more days to try also collect the huge THETA that's available. A really difficult decision IMHO. Mark

Collect cash credits instead of paying debits and you will make a profit if the market runs away from your strikes. Mark

Sure. But, 5% is a lot to leave on the table. I routinely close positions when I am satisfied with the profit AND the risk feels too large for the remaining potential profit. I dont think that applies in this case, unless you are wildly bullish. Mark

Because the credit was only 20 cents. Yes, the probability of success is very high, but the reward is far too small (IMHO). Mark

Concerned, rather than happy. I know plenty of people who went belly up selling (or failing to cover) FOTM options for 1/16 and 1/8 during expiration week. Mark

I make an adjustment when the short strike is breached. I may stall a bit to see if market turns around, but I don't wait long. My preferred adjustment is to roll down and out by doing a diagonal butterfly. For example, if I were short Sep 1000 and long Oct 1025 calls, I would cover that...

If you have an account at IB, please go to the new Voters Poll: http://www.interactivebrokers.com/en/general/poll/poll.php and vote yes for #1034. Thanks, Mark

In the 1970s and 1980s (I specifically remember April 1978 and Aug 1984) a market surge always resulted in a huge spike in option prices. In more recent years, only market declines caused spikes in IV. Mark

Is it really so far on the edge? When my strike is broached, I roll. I don't hold and allow myself to get crushed. I have not been doing these index diagonals for long, and I'm sure there is much to be learned and methods to be changed. For example, this month I held out until Thursday...

Yes, of course. The margin is doubled. It's my stlye, but I prefer having fewer spreads with a greater distance between the strikes than more spreads with nearer strikes. Same margin requirements. Mark

How about the 1225/1175 for a much smaller debit? Mark

When you pay a DEBIT for the double diagonal, it's important that you have a good chance to sell out your longs for enough cash to compenstae for that debit. Suggestions: a) If trading FOTM, find strikes that allow you to obtain a cash credit when opening the position. or b) Move...

As an exoeriment (IRA account) I sold my long Sep options, leaving myself naked short the August index options. The trade went through - even though IB told me they would not allow it!!!! Mark