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I'm curious as to what actually constitutes an "edge". I have a favorite technical indicator that seemingly works across many time frames, and it is derived from very fundamental math principles. (I came up with the idea in an "aha" moment, tried it out in crude form using stockcharts.com, and...

Can anyone explain how they manage their short-term trades on stock, both long and short, with regards to wash rules? I am confused about the effect of a loss being washed out yet accounted for in the cost basis of the next trade. For higher-frequency swing traders, does this mean it all comes...

This is what bothers me about spreads. If I just buy the call or put, I am reasonably assured a correlated move with the underlying, give or take some vega. My mind just can't handle the mad rush to final expected value one sees in a spread right before expiry. This doesn't even begin to...

I use OptionsXpress (and wouldn't except I have negotiated a discounted rate). They net out any spreads where both legs are ITM. I don't get a margin call. This is presumably broker-dependent, but I have printouts of chats with customer service where they made it clear that I was OK if both...

Would you accept as a corollary "and don't mess with it"? I put on 11 trades (among others) in mid-January. These were all ITM debit call spreads upon entry. They all expired Friday. Had I left well enough alone, 9 of 11 would have expired profitable for a 13% net gain. However, I decided...

Sorry, I'm sure I'm misinterpreting #3, but if price falls through support making that level the new resistance, did price really turn? Same question for price climbing above resistance so that it becomes support.

Just that the P/L at expiry can be calculated a priori with no Greeks. It's simply a function of the intrinsic value of the position (i.e. a function of spot and strike prices).

That's for an entire position, right? That's what you mean by "combination"? Seems like it should hold for the whole position if I get my signs right. Now I'm wondering how that all asymptotically approaches the simple P/L at expiry, where the price of the underlying is all that matters...

I have done some math on spread trading in the current market environment. I think you could probably pull 2%-3% per week. I'm probably dreaming, but that's what my expectancy calcs show on a reasonable sample of trades spreading stocks with weekly options, after commissions. As in "put on 5X...

Buy low sell high => Buy low expire high. Sell high buy low => Sell high expire low.

Just re-read this thread after some time off. Fascinating. Apparently, I have learned some of the lessons that were being thrown at me but I was too thick to pick up on. Nothing like a little perspective. In particular, I noticed the reference to a spread strategy beating out long options...

Well, thanks for that? Jesus, what a bunch of gibberish. I eagerly await the sycophants to jump on board telling me I "just don't understand" -- much like cult followers do right before they drink the KoolAid. Seriously, man. Just stop.

He is value-less (but he will continue to post as if he adds value, and the sycophants will lap it up). Don't pay any attention to the zenists around here. If I wanted to chase allegorical bullshit, I'd join the Sufi tradition.

Really? So the market hasn't actually trended higher over the last century? Sometimes I get the feeling that the majority of "traders" out-think themselves.

Offer the spread with a limit order at 50% of the bid/ask. Move it later if you're desperate. I use optionsXpress which, while expensive, does a great job with its "walk limit" feature and usually gets me spreads or combos right around the middle of the bid/ask. You can customize the...

So, it's garbage but you like it?

The bid/ask on the AAPL trade is pretty wide. The midpoint is still currently a loss. I did manage to close the CMG spread @ $2.45 (paid $2.25), so I captured almost the whole gain there.

I'm curious to see if there is a "standard" way that brokers deal with debit spreads where both legs are ITM at close of business on expiry Friday. (For the record, I use optionsXpress. Need to rectify that.) I have Dec13 call spreads on AAPL and CMG that both appear to be on their way to...

Looks like you should have just bought & held.

I am so f'ing sick of the pseudo-English that is spoken on these boards. You people think that by being imprecise you give off the impression of being insightful. In reality, you just give off the impression of being mentally ill. I'm talking about you, tj. Just STOP. Either make money...