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As I have mentioned above, whatever you can think of is already priced in, as per coach's analogy. The only way to make money trading options, or any other instrument for that matter, is to correctly predict the direction of the price move and/or volatility (in the case of options, as obviously...

One note of caution here. Whatever seemingly clever way you come up with exploiting option pricing is not exploitable cause it is already priced in the options. In other words, if it seems too good to be true it is. Otherwise, there's nothing wrong with using options to supplement you buy and...

Well, you can't cause that's the whole point of European-style options vs. American-style options.

I don't know where those numbers came from, but currently that spread is trading at about 260 (355 for 2000 put and 95 for 1500 put). So you are taking in $26,000, with the max potential value of $50,000. So you need to make up $24,000 in interest, and that's a lot of interest to be earned on...

Hey guys, do you mind keeping your very productive discussion about monkeys and majority/minority to the two threads that have been plagued by this, namely: - My selling options strategy. *Newbie* - I just got an assignment...HELP and leaving other threads alone!? Sure there have been a...

The first problem I see with your strategy of selling an ITM put vertical spread is that unless the stock moves up above the short strike you will end up with a max. loss! In other words, you need the stock to move up to make a profit, if the stock stays flat or moves down you WILL LOSE MONEY...

I don't know what the IB policy is on paying interest, so you'd better check with them for exact details, but, no you do not pay interest on the $1000 margin requirement (this is not the same as buying stock on margin) and, yes, you should receive interest on the $900. By the way, don't forget...

Are you kidding? Your intial question was answered on the very first page: QUESTION: ANSWER: ANOTHER QUESTION: ANSWER Obviously after that it got out of hand, but you asked a couple of specific questions and you got specific answers.

Yes, the stock can gap down and you'd end up with a big loss. I know what you meant. In any case, as I mentioned above, selling (writing) options requires you understand the mechanics (i.e. the reasons) of early assignment, if you don't understand the mechanics then you shouldn't be selling...

Great point! And the key to avoiding assignments is knowing when and why are options assigned/exercised early.

Getting assigned means that you carry gap risk overnight. That is, you're assigned, but you can't close out the position until the next day and the stock may gap against you. Also, if you're assigned on the short call going into ex-dividend then you'll be responsible for the dividend.

Good start mate! Your 4th post and you're insulting others already! Congrats for becoming the first member of my ignore list! By the way, what's up with the ...? Didn't they teach you to write in complete sentences with commas and stops!?

Looks like this won't be the best possible start in options for you, but look at the bright side, you'll actually learn something from this experience.

As I've mentioned before, ET is not a friendly place (nor is the market, for that matter), it's the Wild West of discussion forums, you either gotta be really sharp or honest about your experience/knowledge or both. Occasionally fakes come here and claim to have achieved great success, so...

.05 is the minimim tick so you can't go below that. There's a penny-pricing pilot program running on several stocks, which is designed to test the possibility of going to pennies in options, Google "penny-pricing pilot program" or check CBOE's website. At the moment, the only way to try to...

If you go back to the beginning you'll see that it all started very innocently. maae10 asked a question and got an answer (in the usual slightly harsh ET style, but nothing too dramatic) and then some of us also provided a good intentional advice about getting educated about options before...

I agree with nazzdack, you should get yourself educated on all the aspects of options, including pricing and synthetics, before jumping into trading them.

The doubt comes from the fact that you cannot trade options without a basic understanding of them. Whether you're buying or selling them is irrelevant to that knowledge! So, given that you don't have a basic understanding of options, we have naturally expressed some doubt in your experience...

That's my point exactly, you can't even figure out your P/L on a simple transaction.

I'm not debating whether you're legit or not, I'm just saying that you don't seem to know much about options for someone who's been trading options for 3 years. Anyway, you seem to lack the basic knowledge of options so pick up some books read them and then come back with questions.