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Thanks for your reply but I suspect that you didn't read my question carefully. As for your premium doubt, if I sell three $75 puts at $5.80 apiece and buy four $72-1/2 puts at $4.10 each, that's a $100 credit. That's a $1.70 credit per vertical. The actual B/A for the vertical was $1.50 x...

Can you provide an example with actual prices that demonstrates that exercising an ITM call with time premium remaining (and less than the upcoming dividend) is worth it?

If the option's bid is trading below intrinsic, execute the offsetting trade in the underlying first (short the underlying if exercising calls or buy stock if exercising puts and then exercise). This discount arbitrage locks in the gain and avoids market risk. I never get why people want to...

It's been 12 years or so since I used IB's paper trading account so I can't tell you how it works with that. In a real account, the moment you exercise a long ITM option, the transaction occurs at the strike price. If you are closing a position in the underlying, that position disappears...

I own multiple legs in a hedged equity position and I'm wondering if there's an alternative to this problem. One of the legs is a long $75 put with a delta of 750. I want to roll it down to the $72-1/2 put with a delta of about 600. In order to maintain delta, I need to buy four $72-1/2 puts...

Robert Morse gave you excellent advice: "If your expectations have not changed, stay long. If you think you were wrong get out. This is true for every position unless you have reach your max loss you are willing to endure or you have reached your target." DO NOT SHORT 4 calls at a targeted...

That's true unless you fail to close ITM long options at expiration and then the OCC automatically exercises anything $0.01 ITM (Exercise By Exception) and you find yourself with an equity position Monday morning. Rut-roh!

What's the quickest way to make a million dollars? Start with two million. Was he long a sh*tload of calls or did he get bagged on the other side?

That's all fine and dandy if the MM is willing to cooperate near the midpoint but all morning it was no takers. Also, with a directional long put that is up $1.60 in the morning after being up about the same yesterday, I can't sit around waiting for a hungrier market maker at the end of the...

I got filled at $4.50 on the $90 puts. Share price had risen a little but the B/A spread finally narrowed. I also have some long $87.50 puts to unload/roll but they're not cooperating with them either. There's less of a haircut with the synthetic so that may be my only choice. I'll see on...

No, I'm not with ToS. If I was, if the LONG $90 put is $4.20 x $4.70 and I put an order to sell at $4.50 then how would calling in be any better? What would they be doing that would make the sale at $4.50 more likely?

Option premium can start expanding as much as 4-6 weeks before the earnings announcement. You can see 1 year graphs of this at IVolatility (free sign up). Premium may contract back to normal right after the EA or it may take a few days to get there. A noob should avoid options around the EA...

OOPS!!!! BAD TYPO. My apologies and thanks for catching that. That's what happens when I multitask poorly :mad: As part of it, I owned some ATM $90 ITM long **PUTS** that were at $4.20 x $4.70 with the stock at $86.20 .

The short answer is that it's a terrible bet because premium inflates dramatically prior to the EA (assuming that the stock has a pulse) and the premium is going to collapse after the news release. And FWIW, Stk + Put = Call so you could just as well buy the call for the same (poor) result...

It's not clear from what your position is but I'll guess anyway. In order to have an offset, you have to have two positions. If you're writing a put against a short stock position, your protection amounts to the premium received, should the stock rise. If you're writing a 'fat' high IV put...

I have a multi-legged option/stock position. As part of it, I owned some ATM $90 ITM long calls that were at $4.20 x $4.70 with the stock at $86.20 . There's too much time premium remaining so exercising is a non starter. The $85 puts had a reasonable B/A spread so I decided to roll the $90...

First you have to get a list of upcoming earnings announcements. Then you delete low priced stocks as well as those where you don't want to deal with assignment if things blow up (GOOG at $1,200 anyone?). Next, remove those whose average IV trades below a certain threshold (low beta stocks)...

I used to trade a lot of EAs. Sometimes, the back week (one or more out) did not inflate as much. You could get a rough idea of where the back week would contract to by looking at the option chain. More importantly, if the R/R ratio on the position's graph was 3:1 or better, the odds of...

I don't trade futures so I don't know how viable this thought is in that market. From an equity point of view... If day trading, no need to hedge. stops will manage the position. If carrying overnight and concerned about unknown opening price in the morning, perhaps hedge, especially if...

Sometimes you have to trade a strategy to see what it has to offer rather than postulating what you think it has to offer. And given that the loss limits are bounded, there's no steamroller operating.