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I can't speak for the universe of option books but in all I've read, reverse calendar spreads are rarely mentioned because on the surface, they make no sense due to the higher time decay in the near month versus the far month. While I'm far from an expert, I've done a lot of them before major...

1) Scores of options over 6 years is a finite sample. It only proves that YOU would have done better being directionally long with the stocks/strikes/time frame that you chose. 2) Different strategies work better in different circumstances 3) Hindsight is 20/20

When a distribution exceeds 10% of the underlying, they adjust the contract. Therefore, without looking at the terms of the adjustment, I'd surmise that you now have to deliver some cash with your shares, if called. Go to CBOE.com or the OCC web site and do a search on DUG as well as the...

Best case scenario: One spread cost you $ .68 If below 86 at expiration, worth $ 3.00 That's a max profit of $ 2.32 You did 3 of em Max profit is $ 6.96 Short answer is difference is strikes less premium paid or $3.00 - .68 = $2.32 times 3

This isn't going to answer your questions but here goes anyway... I started as an investor a lonnnnnng time ago and ventured into serious day trading 6-7 years ago, trading on the news of the day as well quarterly earnings. Early on it was mostly stocks and eventually it became mostly...

Read everything that you can get your hands on (the library, the web, bb posts, etc.). The more you read, the more it will make sense. It's like learning a foreign language. Eventually, it makes sense.

"The Scientific Options Trader (SOT) is being designed for investors, who has limited time or desire to be active with trading." Now isn't that a fine little recipe for a disaster. If you have limited time or desire to be active with trading, you have no business being in the market...

The protection is the amount of the premium received. The deeper the call is ITM, the larger the premium (intrinsic) and the lower the risk is. However, the more the call is ITM, the lower the time premium will be (extrinsic). Risk and reward go hand in hand. In essence, you're giving up...

Answered only as an accountant would and could answer :) Let's make these guys be technically correct. Net investment. Yeh, that's the trick. :D

Think of the covered put (CP) as the mirror image of the covered call (CC). With an OTM CC, if the stock rises, you capture appreciation from the stock's price to the strike price plus you keep the premium received. Your loss would begin below the stock's pruchase price less the call premium...

-------------------------------------------------------------------------------- Quote from jwcapital: Imagine buying Qualcom at 200, and writing a 205 call, and then watching the stock go to 800. -------------------------------------------------------------------------------- Give or take...

Yep, I missed that (I don't seem to multitask too well in the AM (g) ). OK, subtract the comments about ratio writing. Clearly, you have a handle on writing covered calls and your objectives. Pardon the redundancy but again, I'd suggest NP's instead of the simultaneous CC and if you can get...

Exactly. Where's the edge? I see none.

Congratulations on reducing diminishing your loss on C as it fell apart, Good job! But it appears that yoy carried 2 naked calls in December as you ratio wrote 6 calls against your 400 shares. Yes? If so, then you left the so called low riisk profile of covered calls and dabbled in the...

Your risk comparisons make no sense. A covered call is less risky than a naked call? I suppose that's so if you think that zero limits a stock's downward loss but can result in infinite losses for a naked call since there's no upside limit. And "A covered put is definitely less risky than...

It's not really clear what your stategy is. It sounds like you're buying 5,000 shares, buying 5 protective puts at a lower strike (1 Aussie put = 1000 shrs), buying 5 bullish diagonal call spreads above the position and selling 5 reverse diagonal put spreads below your long position. If I...

Actually, that's not quite true. You have risk down to the protective put's strike price plus any debit paid, if any, for the collar. While it may give you peace of mind to have insurance, there's still risk. In your XYZ example, it's $10.50 . IMO, the dividend isn't worth that risk. If...

Try lightening up a bit TWORIP. The Amazon link to the bankruptcy book was a hoot. Try to see the humor in life (and posts), particularly on a public BB. As for your many questions, you've gotten some really good explanations so I'm just going back to the Peanut Gallery :)

Covered call sellers make a lot of money on their option trades!!! It's the stock that kills em :D

Yep, it's less risky by the amount of the premium that you take in. But since you give up most of the upside, you end up with a strategy with a lousy risk/reward ratio which can only be overcome by having better than average stock picking and/or timing skills... and if you have them, why stack...