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The IRS assumes FIFO unless you identify the shares being sold. That's the easy part. The problem with "identification" is that you must receive written confirmation from your broker of this. See IRS publication 550, somewhere under Sales of Investment Property.

You exercise for 3 reasons: 1) To acquire a long or short position in the underlying 2) To close a long option trading below parity (and then cover the UL) 3) To be healthy

It only makes sense to exercise for stock (long or short) if your long option is trading below parity. If there's any time premium remaining, better to close the option.

Small detail but you'll start to lose money right away if YHOO starts dropping - possibly never seeing break even. Unless, of course, the highly unlikely never occurs :)

http://clearstation.etrade.com/cgi-bin/Itechnicals

Yep, it's the same $700 that we spoke about 10 days ago (page 5). Your position will be gone and the $700+ will be credited to your account, at the latest, by tomorrow morning.

Warrants are similar to options - UL price, strike, TP, etc. - except perhaps with perpetual warrants, if they still exist. I would toss the details into a pricing model to see how they're valuing them (over/under the IV of existing options).

What is "sacrifice return for hit-rate"?

If you sell more naked puts than you account size warrants, that's stupidity. Selling a number commensurate with account sze is being judiciious. It's not an edge. I learned my margin call lesson well in 1987. Having a tendency to roll expiring puts on expiration Friday, everything that I...

Edge may be debatale :) But yes, I think that the gist of the strategy is averaging down when the UL drops below the protective put leg, increasing position size from its gains and profiting when the UL bounces. By any chance was AAPL the stock that was used as a example? I have some...

If the puts and calls are ATM (same strike) then it's not a collar, it's a conversion and there's no point to adjusting. I don't know if it''s the same article but some time ago I read an Optionetics article whose premise was that after a drop, you should roll the collar down and buy more...

10 years @ 3% a month and you're up 3500% Start with 1,000 and go 20 years and you own a peice of Manhattan. Have a Black Swan blow out and your piece of Manhattan is a Pampers box residence down in the Bowery :)

Volatility and risk go hand in hand.

I don't understand the size argument. Risk is risk and it doesn't change with account size. It's no edge.

http://www.cboe.com/TradTool/strikepricecode.aspx

Yes, figuring past adjustment totals isn't a problem but since the broker's portfolio page reflects only open positions, it's just something else to remember. To get around that, I list open positions as well as a line for booked profit/loss. Also figure total and individual gain per leg as...

The broker's portfolio page would be the simple answer as long as partial closing positions haven''t occurred (adjustments). That gets complicated because then you have to mentally track the P&L of the closed positions. A more precise/accurate answer is that if your broker offers a DDE...

Small detail but the max loss would have been $670 at exp, less now (difference in strikes less premium received). Sorrry you didn't get an answer in a timely fashion but I don't think that it would have made a difference. With any adjustment that you make, the underlying has to cooperate...

Before you can determine if there an option strategy to profit from this you have to determine if there's an UL pairs strategy that works. Forget the "negative" part of the correlation for a moment because that's just a question of direction (long or short). A good situation for a...