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Long call+short put is synthetic stock. So if you short the stock and long the synthetic stock you're flat and are not making any money. The synthetic stock will be above the natural by the cost of carry.

It was not an opinion. The OP asked what style are futures options on the e-minis (S&P 500, Russell, Nasdaq). Was I correct in my assumption, polee2000?

American.

I'm not a tech guy so I may be completely off here, but Thinkorswim has a DDE link to excel function or is that different to an API.

Bob, Buying an ITM put vertical is equivalent to selling an OTM call vertical and vice versa (assuming the same pair of strike prices). It's called a box spread.

Well, to some extent, the result on the scoreboard does depend on the strategy scoreboard, so completely ingoring the strategy scoreboard is only hurting your scoreboard. (wow, I almost lost myself writing this sentence):)

Bob, 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 position by going with OTM ones. By the way, I never ever...

"Adjusted" means that they are not standard, which implies that they have some special terms attached making the pricing seem "off". Without looking at the options or the adjustment notes I can tell you that those 3.50 are not a free lunch. The market makers are not stupid, they don't hand out...

Knowing the theory behind options, incl. synthetics and greeks, makes you a more efficient trader as you don't waste time devising a super-smart strategy, which in the end is just a synthetic vertical or a simple long call. You would also know that buying an ITM vertical can be substituted with...

The reason for different margins is that US index options use reg T, which is inferior to the risk-based margining used in options on futures, aka SPAN margining, (e.g. options on e-mini S&P500 futures) and elsewhere in the world. This is about to change though as there are plans to introduce...

Bob, 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. By the way, Schwab obviously has...

With all due respect, Bob, this is not an Optionetics discussion board where most participants know very little about options and/or trading and, thus, will grab on to anything that sounds reasonable. The ET community is a lot more knowledgeable about options, trading and markets, in general...

Market makers can always declare fast market or imbalance and not quote. As I said earlier, if you need to lock in profit then use the underlying and then unwind once the quotes are up.

Time value is only one piece of the puzzle. ATM options' gamma increases as the options approach expiry which can produce some pretty wild swings. For example, some time ago it was an expiration Friday and some GOOG puts were trading at 0.05 in the morning, later that day some negative news came...

Bob, Sure there are. For example, a long 40/45/50 call butterfly is equivalent to a long 40/45/50 put butterfly and also equivalent to a short 40/45/50 iron butterfly (a short 45/50 call vertical + a short 40/45 put vertical). You can also substitute any of the legs with it's own synthetic...

I think, generally, options start trading in sync with the underlying stock, but in practice it can mean a few minutes delay (in some cases 15 min and more when the stock is excessively volatile). If you want to lock in gains on an options position you can always trade the stock to neutralize...

The greatest benefit of SPAN over reg T is realized on naked shorts. Yeah, you're right, ETFs may not qualify for futs tax treatment. Indeed, there's talk of introducing SPAN-type margining to stock/index options, which will reduce that advantage of options on futures.

A synthetic stock means two legs, which means two sets of commissions and slippage. Options are less liquid hence wider bi/ask spreads. And don't forget margin requirement. Not that great after all, huh!?

You forgot XSP. :) It's a mini-SPX index (1/10th) similar to SPY, but while SPY options are like equity options, XSP options are index options. I'm no tax expert, but aren't index options treated like futures as well? The main advantage of options on futures (either ES or the big...

There are options on most indices like SPX, NDX, DJX, OEX (XEO), RUT and etc. ETFs are an alternative, but you can go directly with index options. Here's a link to the CBOE's index options page.