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Each has its own advantages so therefore, strategy selection is based on your expectation (hope?) for the UL.

If it's a 2 days or less trade, you're concerns are IV contraction and price movement. If a longer tome period, time decay becomes more relevant.

That loss point is at expiration. Drop before then affects your margin and peace of mind. IV increase also adds a bit to the margin pain. A problem with ITM CC's that people can be unaware of is that the position starts to lose immediately as the UL drops. If it keeps dropping, the loss...

Some other ideas to add: If the near month's IV has inflated heavily and the 2nd month has also inflated a bit (skew), there are a number of possibilities with straight and slightly ratioed calendars, ATM and OTM. These would only be viable if you're betting on a rise no more than 1-2...

Per Pub 550, acquiring an options to buy substantially identical stock is a wash sale and wash sale rules apply to losses on options so the inference is that different options of the same class would also be violations. AFAIK, Fairmark.com is a reputable tax info site. Their opinion is that...

You're assuming that the seller is opening the position and had risk. He could be closing and existing position, salvaging some OTM cash that will be gone by the end of the day.

An option is the right to buy (call) or sell (put) a specific underlying. The seller of the option has the obligation to fulfill the terms of the contract. It doesn't matter who bought it when or at what price or how many times it has changed hands or whether they made or lost money on...

A specific buyer purchases the call that you sell. However, anyone owning that same call can exercise it and you could be the one assigned. OCC assignment to the broker is random but I think brokers may have specific rules as to how they dole out assignments.

I would say that they are not unique but you never know because tax law is often confusing and contradictory. See WASH SALES as well as OPTIONS in IRS publication 550 and draw your own conclusions.

There are a bunch of ETFs, many of which have options. EWI (Italy) has been pummeled but you might look at the other PIIGS as well as other Euro member ETFs.

To repeat, check the prices in real time. The bids of those ultra deep ITM calls trade below parity, reflecting the future dividend(s). You will not be able to put the position on at these prices.

Shares not borrowable but borrow rate at IB is 95% Ouch 2 years ago I had 12,000+ short shares of C via a conversion. Borrow rate was a little over 100% and my delusional idea of scalping those shares intraday went out the window the first day I saw the borrow charges. It was like swimming...

Check the prices in real time. The bids of those ultra deep ITM calls trade below parity, reflecting the future dividend(s). Their spreads are wider so the slippage will also chew up some that "free" dividend money that you perceive.

I think you answered your own question. A long strangle is a directional strategy and if the UL's are moving, strangles do better. The movement is the main course... IV increase is the gravy.

Don't get hung up on the "odds" of early assignment. If you're a CC call writer, early assignment is a good thing because you don't have to wait as long (exp) for that maximum profit. If you're a NP writer, getting assigned while OTM is a good thing but very unlikely to happen. If...

Math is right but when I looked at it, T was $29.25 and I think you'd get 9 dividends for $3.87 That's about 11+ % (unless I got the # of divs wrong)

Simpliefied explanation... Equity buyer pays for stoick. If margined, pays more since borrowing. Put seller retains cash, receives interest. That's better for the put seller. Since the positions are equivalent, put price + carry cost = call price Hence, call premiums are...

------------------------------------------------------------------------ Quote from spindr0: Re your put protection idea, the last thing to mention for tonight is the possibility of collaring your positions. Sell OTM calls to fund the cost of put protection (reduced cost for ATM closer to no...

It all depends on where the UL is trading when you are assigned. You might make something. You might lose something. It doesn't have to be a short squeeze - call can trade below parity and gets arbed. However, if it is a short squeeze, rut roh! Unrelated to options... I've received...