Search results

Skew isn't a function of UL price

It appears that the calculations aren't that simple :) If the spread costs $2.40 then the maximum profit is $2.60 In order to realize the maximum profit, the UL will have to be outside the short strikes *at* expiry. Prior to expiry, the short legs will be a drag on profitability and...

Inside your head

That's about the most sensible suggestion that you have made here in months. :)

Opened a chain for TEX @ $22.70 A 3% move is about 70 cts Apr 22c has delta of .62 so that's a 40 ct gain if immediate move Takes 5 days to move 3%? Maybe lose 15 cts TP so net 25 cts. Not a lot of gain for being right. Want a higher delta (90+)? Some strikes below 20 have 50-60 ct...

I really don't now since it has never happened to me. That's probably because I do everything that Elite Traders suggest! :D :p :)

You'd have to call your broker to determine their policy but I wouldn't be surpised if they covered the assigned position ASAP in the after market at the WORST possible price. And if that didn't CYA then they'd start liquidating other positions, if anything, that you have in your account. And...

When you sell a naked put on a $30 stock for a buck and the stock goes bankrupt, that's Max Pain.

If your screen can reliably predict 2-3% moves in 1-5 days on low priced stocks, trade the stock. B/A slippage and commissions are lower and you won't have to fight that pesky delta or IV fluctuation.

If there's TP remaining, early exercise can be a good thing. I once had short MSO calls with over a pt. of TP assigned. Covered and re-sold them at the open. No complaint there :) Another consequence of short stk assignment of a hard to borrow stock can be high carry cost (see 100+ % ind...

LOLOL...You remiind me of a clown on Yahoo who when called on his nonsensical option posts would go monkeyshit with a claim that a comma was removed from the quote of his post, thereby changing the entire context. As Forrest Gump says, "Stupid is as stupid posts." :)

I've seen that in many option books! A vertical spread isn't a vertical spread if you leg into it! What planet are you from?

If you have timing and discipline skills, you may do much better by legging in. If you don't, you'll do worse.

Look for EA's later this month where the near month's (or weekly's) IV has inflated dramatically.

Sticking to easy to understand setups is good. Finding similar set ups with higher R/R ratios is better :)

Unless you have an exceptional knack for timely selection of UL's that move up/down dramatically and/or experience a decent amt of IV expansion, you're going to get into trouble with 2:1 ratios. The time decay will kill you. Add to that a hedge that has the potential to periodically add to...

Au contraire mon frere... What happens to these if price moves far away from the center?

I have minimal experience with commodities so I can't speak to that. If the IV of SCO et al expand during up moves as well, your correlation hedging concept may be more viable. I'd be surprised if you found it but you'll never know unless you look. :) IMO, EA's are a good place to utilize...

Like most vendors looking for site/seminar subscriptions, Optionetics glamorizes the performance of a strategy and minimizes the risk. I particularly like the way they make up their own names for existing strategies :D TLJ looks attractive because of its relatively low risk risk as well as...