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The problem with that idea is that the IV of near term options inflates severely prior to the earnings announcement. The ATM straddle for TSLA for 5/04 costs about $25 with an IV that's about 50% higher than later weeks. With the EA in the PM, break even will be about +/- $20 or so early...

Long straddles are useful if you have the ability to find securities that will make a sharp move in price in either direction before expiration. If you don't have that ability then, not so much.

I too am neither a CPA or a lawyer, just a mere commoner trying to fathom IRS mumbo jumbo. Let's take it one step further. Instead of XOM and CVX, find two highly correlated stocks. Suppose it's a gold stock and XOM. Buy one and short the other, hoping to generate an offsetting loss on one...

Exactly

Some brokers allow limited margin accounts for IRAs (trading on unsettled funds) so cash secured short puts are allowed. As I understand it, the IRS has a no loan policy for IRA accounts (no margin). To comply, you cannot use the IRA assets as collateral. So how do you sell naked calls...

It's a little late for this info but you should either close the option during trading hours or instruct IB not to exercise. https://www.interactivebrokers.com/en/software/glossary/content/glossary/exercise_by_exception_processing.htm

When you're down and troubled And you need some love and care And nothing, nothing is going right Close your eyes and think of me And soon I will be there To brighten up even your darkest night You just call out my name And you know wherever I am I'll come running To see you again Winter...

Selling naked calls prohibited in an IRA account. How is Tastyworks getting around that one?

This time is different !!! :D

And what if he picks 20 winners ??? :D

Here's the IRS info on "Presumed offsetting positions" : ----- Two or more positions will be presumed to be offsetting if: (1) The positions are established in the same personal property (or in a contract for this property), and the value of one or more positions varies inversely with the...

How about this? Do a pairs strategy on two highly correlated stocks in the same sector. Buy a gold stock and short another one (pick whatever sector amuses you). Weight the positions accordingly. Barring some company specific news, chances are that they will have similar $$ performance...

A Pattern Day Trader is a person who executes 4 or more day trades (options and equities) in 5 business days in a margin account, provided the number of day trades are more than six percent of the customer's total trading activity for that same five-day period.

The OP has left the building, now running Steady Eddie Options, repackaging all of the expertise he gleaned here. Currently, he's running his annual "Christmas in August" sale, oblivious that it's April. The web site banner proclaims: "Steady Eddie, his prices are IN-SA-A-A-A-A-ANE!".

LOL. Perhaps next time we should just ask for the symbols? :D

Reading this thread reminds me of Sea World where the keeper (the OP) tosses a scrap of chum into the tank and the sharks scramble over it: (looking at wrong prices, a dividend increase announced, index skew, put-call parity, one time dividend outstanding, takeover, conversion...

I assume that you meant that the put is $3.05 and the call is $3.10 ? I think that the carry cost would account for the 5 cent difference in price.

Yep, thanks for the catch.

All things being equal (all option pricing variables are in the same relationship) then there's no significant advantage in a higher priced stock over a lower one other than possible % B/A spread differences and commissions. Premium is linear and the return will be dependent on your picker.

Yeh, I understand that but those factors should not account for an average difference of 77 per cents per contract. I guess that I have to collate the data from my statements and see if the exchanges involved demonstrate any kind of pattern. If so then Plan B might be to direct route some of...