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Perhaps this might be of interest: http://www.streetauthority.com/terms/options/4.asp

Simple question, tough to give a simple answer, particularly to a newbie :->) Selling OTM covered calls provides a small hedge. You have to be willing to sell the stock and you maintain most of the risk. Buying protective puts does a much better job but they cost. The better the...

When the IV is this high, there's usually some news waiting in the wings. With DNDN, it's a question of whether the the FDA is going to follow the advice of the advisory panel's recommendation of Provenge - which resulted in the 20 point rise. The problem is that Provenge failed to achieve the...

LOL. You guys were on the bus before I even thought to buy a ticket. Any improvement that you work out will move me up the food chain. I appreciate any effort made that won't cost me my first born. On second thought, take em all ! :)

No, thank you. It's not often that I get it right! :)

The probability of making a profit is very different from the expected return.

A short straddle has a higher probability of making a profit than a long straddle. Unfortunately, it's not that simple. The short straddle has a limited profit potential and a large risk potential (lots of small winners and losers and an occasional killer loss, wiping out many small gains)...

nonprophet: Thanks for your interest in this adventure. Here's what I have now. Not that I'd need so many but the program allows for entry of 28 options. 28 may be too many but sometimes, extras are needed because a 4 legged position might be legged into and there are fills at...

Whole and fractional stock splits involve strike price reduction. And sometimes, special dividends equal to the difference in strikes. Spin offs tend to get messy since they involve shares of both companies and sometimes even worse for the bookkeeping, the dreaded cash in lieu throw in...

I'm no expert and I don't care for butterflies (I prefer condors for the wider profit zone) but here are my issues with your GT butterfly: Because GT is closer to the 30p, it's a bullish position. And since we're fairly close to Apr. expiration, the 35p is near parity. You're getting no...

The best option commissions are 75 cts to a buck unless as mentioned by others, you do size. Another thing to consider is the nature of your trading. While unlimited contracts for a flat fee is attractive to some, being able to incrementally add to or reduce a position without a minimum...

Small detail but only roughly 40% of equity options offer LEAPS. As for the delta versus time thing, it depends on whether the calls are ITM or OTM. The delta of OTM calls (and just slighlty ITM calls) increase with time. The delta of calls just OTM and higher decreases with time... and...

MTE, Thanks for the suggestions. But just to be sure that we're on the same page, let me rephrase the question... and pardon me if you already understood it. I am currently able to calculate the average IV of my position and via my esti-guesti-mation from IVolatility, enter in a single...

You can get historical option data one issue at a time at: http://stockmarket.businessweek.com/stocks/quote.html They changed data providers a coupla months ago and IMO, it's not as good as it used to be. They used to provide closing B/A if there were no option trades and now, nothing...

I use an old DOS program for modeling my pre-earnings ratio calendar straddles and strangles (or whatever they're called). It enables me to adjust the overall implied volatility value to get an idea of what the risk/reward spectrum will be the next day after IV collapse as well as going forward...

Those are the 2 big issues to consider for option buying. IV is another, but for simplicity, let's ignore it. If you are certain of your time frame, go with a shorter month. If not, go with a longer month. As for which strike to buy, the OTM put will give you a greater percentage gain...

I've been tinkering with options for 20+ years and have been assigned countless times. But believe it or not, I have never exercised a position. So let's treat this like a newbie question :) I trade a variety of ratio calendars and strangles for earnings. Two weeks ago, I had a leftover...

The one that works better is the better choice (higher credit or lower debit). Legging in is better if you have the ability to catch a small trend yet are disciplined to add the 2nd leg quickly if you're wrong. The deer in the headlights trick is a killer :) It's a bit tough to leg in...

No problem at all :) What I was alluding to was that one might try to make a connection between ATR and HV. That might be more reasonable since both are historical (as compared to the forward looking aspect of IV). But even that connection would be suspect since ATR involves...

Absolutely true. That's the entire basis for postulating the risk/reward of an option strategy post news. But what does that have to do with IV versus ATR?