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Let's see if I have this right. Cashmoney69 starts this thread about a synthetic call. It's apparent that he's a relatively new to the concept of equivalence. Over the course of 3 days, several posters provide assistance explaining this. To keep things simple and to demonstrate the...

I don't know a thing about skew distribution and option pricing so I have no clue what its relevance is. But what I do know is that if you look at an ATM put and call and you drop the interest rate to ZERO in a Black Scholes model, both options will have the same price. If you still disagree...

Given a post EA IV of 45, I think that your profit range is too optimistic. It's narrower. Plus, you go negative fairly quickly if RIMM drops. Historically, RIMM has dropped to approx. 40 post EA. An IV that low won't give you much profit potential on your diag. For the past few...

AFAIK, that's the advantage to the synthetic. Then it's off to the races with adjustment possibilities.

You're a very dab boy!

Well, that would be one of the possible choices in that circumstance.

Good question (a light bulb moment?) But what if you have gains in the stock (or long call), you're still bullish and you want to stay in the position but you want to protect some of that gain? Hmmm... Could a legged in synthetic have some use? (scratching my head :>)

When you do these calcs, you have to use the respective B/A's of the components and the quotes must be real time. Last trade and closing quotes can be inaccurate since the time of a trade in one option might not correspond to that of the other nor to the price of the stock. If done in real...

LOL. Yep. But I think that the all time winner is "Why are there two option symbols for the same strike?"

Let's try a simplistic example, ignoring carry costs, B/A spread, dividends, etc. Suppose RIMM is 100 and the 100p and the 100c are $1 apiece. 100 shares of stock plus 1 long 100 put costs $101. 1 long 100 call costs $1. Now calculate what the profit or loss will be at any stock price...

If RIMM drops and you cover your long put for its profit, you are then unprotected on your RIMM and will have a larger paper loss than the gain that you booked on the put. At that point, you must either buy a lower strike to maintain protection or you must be clever enough to time a rebound...

Right or wrong, at least you had the courage to post your position. Just curious... Why did you do put protected stock instead of just buying the call? Why incur extra commissions?

neke, Tho I might have stumbled across it anyway, thanks for posting the HAR info. It was a great short this AM in the pre market and I feel sorry for those whose short puts were assigned and don't know better than to wait until 9:30 EST to deal with it. Now I'm watching for a possible dead...

There are no free lunches :D

LOL. That quote does not say the last available HAR price from September 21,2007 "DURING REGULAR HOURS." The last known quote from September 21st is what HAR traded at, at the end of the day ($82+)

You lost me on this one. If HAR is $85 Friday PM, the calls are OTM and worthless. Why bother?

Brokers can require higher margin requirements than Reg T... and I don't know what other brokers, if any, offer this. Is this even allowed? The info that I posted came from the CBOE's web site. If they're wrong, is anything right?

http://www.fairmark.com/capgain/wash/wsoption.htm Losses on Options Congress amended the wash sale rule in 1988 so that it applies directly to contracts or options to buy or sell stock or securities. That means you can have a wash sale when you close an option position at a loss, if you...

Long Call – more than 9 months until expiration Initial margin requirement: 75% of the total cost of the call(s) after position is established, ongoing maintenance margin requirement applies and an increase_(or decrease) in the margin required is possible at 9 months before...

Even stupid people can make money in the stock market :) Day-schmay claims 6-10% per month. Let's be conservative. At 6% per month, your money doubles every year. In 5 years, $10,000 become $320,000. Well heck, if I'm that good, let's mortgage the house. A mere $100,00 becomes 3.1...