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It's exactly that - a lottery ticket.

Don't say never. For 20+ years, I never exercised a thing. But with IB's free exercise, I found myself in a few situations where the option was trading under parity and it was more profitable to buy/sell the stock and exercise. It doesn't occur often but why give away money when it does?

That's usually the case with most brokers and more so with IB. Owning one Jan '10 90 call gives you the right to buy 100 shares of GSF at $90 or $9,000. You cost basis will be $100 (strike plus cost of the call). Based on the info that you provided, upon the completion of the merger, 100...

GSF has nothing to do with how the options are handled. The OCC takes care of that. I would not assume anything. The OCC will determine what the adjustment terms are. Regardless of how they proceed, the adjustment will not affect the value of a position. Only option pricing variables will...

To be covered (for margin purposes) you'd need to be short the stock or own a put with the same expiration or longer/same strike or higher. Otherwise, you have to put up margin. In your case, tho you have the cash, you are not protected against loss. That's why it's called a "naked" put.

Hey IV. The risk/reward may not be 9:1 but a noob often finds a way to give back a chunk of a naked write's profit :)

I think that on a stand alone trade, most people would take 90% of the profit now versus risking that amount for 10% more profit and would move on to a better opportunity. But in terms of staying with AAPL because you're bullish, for your consideration: The Nov Oct 150p @ $3.65 that...

As commiebat indicated, your options will be adjusted to reflect the terms of the merger. To get a better idea of how this wroks, you can read about other mergers at: http://www.cboe.com/tradtool/contracts.aspx

>> ›› $1MM liquid -- how difficult to achieve 15% annual ROI with option writing? >> You're asking this on the internet where there is some truth and a whole lotta perfect traders and soon to be Warren Buffets? :) Sarcasm aside, it's not a question of how difficult this is to...

OK, I sit corrected. Either way, it's not about me :)

Assuming that you're not spamming for the site... In general, if anyone was that good at stock/option picking, wouldn't they do a whole lot better if they traded their brilliance? FWIW, you have to watch out for how tout sites calculate/distort their gains. Many use exaggerated...

OP = Other Poster

If there's time premium remaining in the short leg, you're unlikely to be assigned early. Also, the ROC of delta is not going to be a factor to either side of the strike because you have offsetting positions. As mentioned by MTE, only a better fill would make the ITM calendar more...

1) There are no free lunches 2) If it looks too good to be true, it is 3) See OP's reply that they are going Ex-Dividend on 10-Oct-07 for a huge dividend

Stop worrying about early assignment. If there's time premium remaining in the short put, it's highly unlikely that it will be assigned early. As MTE suggested, if you don't have the funds to cover the stock position then you will be issued a margin call and you will either have to deposit...

And had RIMM dropped 10+ pts this AM, thereby making the put a winner, someone would be saying, "There's the logic for trading the synthetic call." :)

Some people think that they're smarter than the market.:confused:

There are some errors in your post. Most are minor. Some clarifications: b) To cover myself I Buy LEAPs (Apr 2008) Those are not LEAPS. LEAPS have more than 9 months remaining. (a) I want to Sell short term (Oct 2007, Nov 2007, Dec 2007) PUTs for income. (b) To cover myself I Buy...

Break down and buy some clothes!

Hey IV. I did the OTM double RC on RIMM. As usual, thanks again for bringing this strategy to attention deficit types like me :)