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Just take your medicine and go back to fighting those imaginary wars with market makers on your demo platform.

Just buy some further OTM puts on the SPY or in whichever one you have an IC.

The easiest way to protect your position is to buy some way OTM puts on the actual underlying. The main problem with VIX options is that they are priced off of the VIX futures and not the spot VIX so buying May VIX options may not do you much good if the markets selloff and the spot VIX goes...

All options that are ITM by 0.01 at expiration are automatically exercised, unless you specifically request otherwise!

Yes, OEX is a very special animal precisely due to the combination of cash-settlement and American-style. :)

ES and NQ are futures contracts based on indices, they are not indices. I agree it's more or less semantics, but for a newbie it can very confusing so everyone should try to use the correct terminology.

No, all index options are cash-settled so you cannot flip out of the stock position as there's no stock position, besides most if not all other index options are European-style.

If the stock moves in your direction and you lose money on an option then you lose on a volatilit drop or time decay so you get vega-ed or theta-ed.

First thing to keep in mind when making any adjustments is that there's no magic wand that would turn a losing position into a winner. So if you have a bull call vertical and the stock is trading near the lower strike then it's a loser (well it depends on where exactly it trades and how much you...

I can't speak for others, but there are two reasons I try to get out before expiration. 1. I trade index options that settle on the opening print and this is a total lottery. So I try to avoid playing it as it can turn a wining position into a loser in a heartbeat and there's nothing you can...

hlpsg, What you are talking about is a problem in SPX and other index options that settle on the opening print. SPY and its options trade all through expiration Friday so you really don't have much of a problem.

Yes, you can exercise and sell, but if you exercise early then you lose any remaining time value that is left in the option. So you are better off selling the option, but you would also have to buy back the short option. SPY options trade till the close on expiration Friday so you can close...

This is not correct. If you have a short vertical spread in OEX (American-style index options), and you are assigned on a short then your loss is NOT limited to the difference in strikes. The reason being that your short assignment would be marked against one settlement price, while the...

There's no such thing as non-cash settled indices. All index options are cash-settled. What you are referring to is European vs American-style options. The problem you are describing is the problem when trading OEX options, which has American-style options that can be exercised at any time...

Going beyond Vega you have Vanna (sensitivity of Vega to changes in price of the underlying) and Vomma (sensitivity of Vega to changes in volatility).

Well, of course you knew, you read my mind. :D (that's it, I'm installing a mind-read blocker today!)

There is very high correlation, but correlation doesn't tell you the % change given 1% change in SPX. And given the mean-reverting nature of volatility I don't think you can make any conclusions with respect to the SPX 1% - VIX x% relationship. Your main problem is that VIX is a poor proxy...

Oh c'mon def, fess up! Thanks to traderum we now all know you can read minds there at IB. And amazingly he has uncovered your dirty secret without losing a single penny of real money. :D

You need to link the two orders using One-Cancels-Other (OCO) function.

Unbelievable! :D :D :D ET thank you for this entertainment!