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In my experience, fat finger trades are more likely with more illiquid equities in the pre/post market where the spread is Holland Tunnel wide and it overlaps a round dollar amount. In turbulent times (2008, Brexit, etc.), I will enter B/S orders with price alerts for adjustment early in the...

I don't think much about commissions with spreads since at 70 cents per contract, it's peanuts given the profit potential. What cuts into the meat is the add'l B/A spread, even more so when options go deeper ITM.

A woman sees a psychiatrist for the first time and tells him: "I saw another psychiatrist and he said that I am obsessive-compulsive, neurotic with controlling tendencies. I want a second opinion !!!" And he replies, "I think you're ugly too!" OK, with apologies for that...

While that may be true, I'll take having to be "more right" with the spread than ending up far "more wrong" with the naked option. As for volatility exposure, on my level, unless it's a volatility play on earnings, volatility exposure doesn't mean much since it tends to even out over time...

True but sometimes lightning strikes. Two years ago I was short EXPE pre earnings at $88 with a $86p / $89c collar. EXPE crashed and since I hoped for further volatility, I covered the short shares at $78 and I bought $78 puts in maybe a 1.3 ratio (13 long puts per 1,000 shares). A big move...

Fat finger trades really hurt. Been there, done that and it's definitely not better to give than to receive. Also consider the possibility of bad data. That too occasionally happens.

Apart from the patronizing tome of your reply, as tommcginnis said, thank you for your participation in trading the financial markets! Saving a nickel or a dime (or more) on 10-20-50 spreads can really add up and make a difference in ROI.

I find that spreads tend to get filled at the midpoint faster than single legs... but I'm merely a finite sample :D

If the stocks correlate, the entire position would be closer to market neutral than not. If not correlated, not so much. For example, if your 3 bear spredas were in the O&G sector and the other 3 were financials, it's quite possible that both threesomes could make money (or both lose) as one...

Covered call writers are often Buy & Hope types who rationalize away the risk of the entire position by saying "I was going to hold the position anyway" whereas when they hear the word "naked", they wander into fear of unlimited loss or in the case of a put, underlying loss down to zero, not...

Margin for a short ATM equity option is approximately 20% so for Reg T, the ratio is about 5:2 (brokers have the right to be more restrictive) IRS rules are often vague and misleading (IRS Pub 550) and this issue of options and wash sales is no different. I'd suggest that you research this...

There is no best way. If you start just above the bid, you might get a good fill but the odds of getting it are lower. If you offer more, the odds improve but the fill isn't as good. So it really boils down to how much you want the position and how much you are willing to pay for it. If your...

Two elderly women die and go to heaven. St. Peter says to them,”Ladies, I checked the files and you have led an exemplary life and as a small token of our appreciation, we are going to give you back the body you had at 18 and let you go back to earth and have sex with one person of your choice!”...

You missed the point. If A = B then you can do either one of them and get the same result. If A does not = B then they do not provide the same result. We are talking about when A = B. You are talking about when A does not = B and that isn't a synthetic. IOW, when it's the same series, the...

The earlier reply wasn't clearly worded. Short puts and covered calls are synthetically equivalent if they are of the same series. If XYZ is $48 and you wanted to sell the OTM $50 covered call, the synthetic would be the ITM short $50 put. Conversely, if you wanted to sell the OTM $45...

What's a troll ??? :D

The book doesn't teach you to trade nor do I suspect many will. It teaches you the language of options and how they work. Other books will provide an even deeper understanding. AFAIC, a lot of trading knowledge comes from actually trading and for many, there's a bit of market tuition...

Setting up a variety of option orders and buying and selling options and equities doesn't require rocket science. I don't like IB's software - especially the headaches that arise with new upgrades - but it's not bad enough that I need to go elsewhere. One thing that I really do like is the...

For me, the moderate reduction in profit potential with a vertical is worth it for the far more significant amount of risk reduction that a short put bears. Last year, many "safe" Dividend Aristocrats dropped 10-20% or more in short periods of time (CAH, TGT, GWW, KMB, HML, MDT et al). When...

The short answer is that your single bearish $255/250 put spread costs $2 and can make $3 so if the underlying stays up, your combined position does $2 worse and if it drops, you can achieve a maximum of $3 less loss. All your hedge is doing is shifting the BE and R/R a bit.