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IRS rules are ambiguous but I would assume, perhaps incorrectly, that the puts are substantially identical since they both profit if XYZ drops. I have an open order for a calendar roll but so far, no fill. If I get a fill, I'll do the same with my other long put position, converting both to...

Geez, that's an obvious answer. I should have thought of that. Now all I have to do is find some cheapie option to buy and and get a fill. Thx

I thought of that possibility but there are two problems. - I don't want the new BTO position - Isn't the BTO creating a wash sale violation since the STC position is at a loss? (I don't have TTS) I think that the answer may be do as you suggest but as soon as there's a fill, immediately STC...

With a higher delta, the $160 call will make more dollars than a $162 call if the stock goies from $160 to $163. However, the $162 call will have a larger ROI since the call cost less. Comparing one of each call, the ATM call makes more. Comparing an equal dollar cost (buy more OTM calls), the...

I've used options for 30+ years but I've never experienced this situation. I have 3 different worthless long and short OTM Jan puts that I used for months to hedge a long equity position which has since moved up and has been sold. I want to harvest these losers for tax purposes to offset my...

There's an arb available if the time premium of an ITM put is less than the dividend. Here's a simple hypothetical example: XYZ is $40 Sep $45 put is $5.30 ex div is tomorrow for 50 cts Buy stock, buy put, exercise after ex-div, collect dividend on Pay Date - $40.00 - $5.30 + $45.00 + $.50...

Yes, pending dividends are reflected in the option premiums (puts increase and calls decrease). OK, you have seen many of your ITM short calls assigned early before ex-dividend and you have never seen a short-put assigned early before ex-dividend. Therefore, your finite experience with these...

How do you figure a very small profit if called away? You received a $21+ premium plus 70 cents of appreciation to strike. Also, BABA doesn't pay a dividend.

Either I'm on a different page than you or I don't understand your reference to my comment. The statement by ET180 that I disagree with was: > If you have ITM calls then they will likely get assigned on the prior day provided that the premium left on the call is less than the expected...

Your broker's information is wrong. To be eligible for the dividend, you must buy the stock at least two business days before the date of record. Translation? If you're short the stock on the ex-div date then you're short on the record date and you pay out the dividend...

I don't agree. If there is time premium left, it's thrown away by the owner who exercises the call. In addition, there's no profitable arb by doing so since share price reduction by the amount of the dividend is a wash. However, that statement is true for an ITM put: - Buy stock - Buy put -...

About 7% of options are exercised and I would expect that other than near the ex-div date. more of them happen near expiration than before. The 4:30 AM assignment time is probably the time that your broker was notified of assignment. The exercise occurred the day before. You are not on the...

With selling covered calls and the synthetic equivalent of selling short puts, two old expressions come to mind: - It's like collecting pennies in front of a steamroller - Most of the time you eat peanuts and sometimes you shit like an elephant

Coincidentally, I just came across this explanation on Stack: As an analogy, consider people betting on an (American) football game between Team A and Team B. Let's make buying the option analogous to betting on Team A. Then selling it is analogous to betting against Team A. The sale price...

+1 for the pic but a better one from "Trading Places" is the last scene of the movie when she waves from the yacht as she's sailing past the beach :sneaky:

Applicable to: "to someone who has never heard the word and has no desire to learn about them." Sticking with the ag suggestions, how about you're a farmer who grows a very desirable fruit that is in limited supply. You could call it "Le Grand Orange" ... and no, I'm not talking about Rusty...

I'm going to assume that these are standard BMY options not the adjusted ones with the cash and contingent value right attached. If so then your Jan '21 BMY $40 call has a near 100 delta with very little time premium so in effect, you hold the equivalent to the equity position. What to do...

Is that some sort of new fangled 201k plan ??? :D

Need help finding a way to trade with a 1/100 (risk/reward)

I can't source it but I agree with you that long dated options more expensive now. When LEAPs were introduced nearly 30 years ago, they were far more attractive for diagonal spreads. It took fewer months of writing to recover the time premium paid for the LEAP.