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Basically, yes. The difference is that specs take speculative positions in expectation of making a profit. Commercials hedge their underlying instrument position so that they are not losing money, they are not interested in making a profit.

Those would be fund managers hedging their underlying stock portfolios. Not necessarily. I mean it is not as clear cut as that. Commercials are big players as well so you cannot just disregard them.

There's a simple answer to your question and it lies in the definition of a market order. A market order is to be filled immediately at any price. In other words, you want immediate execution and you don't care about the price. By the time your market order reaches the market it may have...

Well, there's a tax advantage to trading index options as opposed to equity options, but this really applies only if you pay US taxes. The size of the OEX and especially SPX makes selling far OTM premium attractive as opposed to selling the equivalent options on SPY.

That would be simple return, if you want compounded return then you divide the premium by margin, add 1, raise to the power of 365/25 and then take away 1.

The world's largest institutional investor is the Bank of Japan. The second largest institutional investor is the Abu Dhabi Investment Authority (ADIA), which manages emirate's excess oil reserves, estimated to be as much as $500b.

About what, OMG, WTF or GFY?:D :D :D

I didn't say you would definitely outperform the market, but can have a capital guarantee. Anyway, the plan is very simple. To have 100% capital guarantee, assuming you can get 5% on a CD, is simply investing 95.5% of the money into a CD and then using the other 4.5% to load up on the...

That's the point, you use only the portion that allows you to b/e at the end of the year. So even if you lose the total premium you would still b/e. I'm too lazy to go into the numbers.:D Anyway, if you're really lazy then you would just buy the calls and make sure you get your capital...

The problem with futures, as it has been pointed out above, is the margin call, i.e. that your loss is not limited to those 10% you used to trade futures. If you buy options either call or put, your loss is limited to those 10%. As to how many you should buy that totally depends on the amount...

If you hedge currency exposure then your return will be no different than investing in the US, I'm talking about t-bonds and their overseas equivalents.

I didn't say you did, but that wasn't the point. The point is that you can not only achieve the returns by using leverage, but also have a capital guarantee either 100% or less with options as oppose to futures.

There's nothing special about this. It has been known and used for years. However, typically you wouldn't use futures, but you would use options. The reason being that with futures you can lose more than you have, with long options you cannot. This is the most basic structure of a capital...

If XEO reaches either 565 or 605 the OTM option will have just as little time value left. Besides the bid-ask spread will be even wider on ITM. So I don't buy that argument either.

It's called a Gut, i.e. ITM strangle. It is the synthetic equivalent of an OTM strangle (in this case 605 call and 565 put). The only difference is that you tie up more funds in ITM one, the intrinsic value of $40. In fact, I bet the OTM strangle was selling for 4.5, give or take a dime...

As far as I'm aware, it's coming, not sure how soon as some of the infrastructure has to be upgraded, but it sure is coming.

After the news are announced there's no more uncertainty and the IV drops significantly, which hits the options, all of them ATM, ITM and OTM.

Your buying power is reduced by 400 so it's 25%.

basically, 500 will be set aside, but since you take in 100 the net effect on buying power will be 400.

How do you define a "huge" move? 10, 20, 50 points? At the moment, Jul options are pricing in about 25-27 point move.