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As mentioned in the first reply you received, in general, yes. Deep ITM options tend to have wider spreads so slippage is usually more of an issue with them. The most bang for the buck per round lot (option vs stock) is with the underlying. Time decay is irrelevant intraday. Premium is...

It's useful to understand synthetics in order to find the least common denominator and get somewhere with the fewest number of legs (not what you're suggesting) or perhaps to facilitate "mutation" of a position in order to shift bias but there's no pricing edge in them.

That might be true if their inclination was to make some money :)

It is the way it is until it isn't.

While it's true that as long as you're not leveraged, a Black Swan event can never wipe you out, it's not the basis of a great plan. I would hope that the reason for buying an ETF and selling covered calls is that you are mildly bullish. Just buying an ETF in order to write covered calls on it...

Buying and selling options isn't a cookie cutter process where there's some rule that gives you the best return. The optimal time to close an option position is when the difference b/t the low and the high is the highest. Since that can't be known until expiration, each day you have to weigh...

-------------------------------------------------------------------------------- Quote from Ms Varima-Garch: your comments show how confused you are about the options world. mark wolfinger is a well-respected member of the options community, known for his highly successful books and...

Instead of running people and yourself around in circles, get hold of a risk graph program and prove yourself wrong. Pick an implied volatility so that all options are based on the same IV. Input a long OTM strangle against a short ITM strangle (same month and strikes). Graph the psoition...

If 90% of market participants are short and 80% of options expire worthless then are 72% of investors dead midgets??? (my apologies to all live midgets reading this)

Bigger? In what way ???

Best day and month ever, September 15th of '08 when Lehman went under. Unfortunately, I don't qualify for the topic since I was short its derivative equities.

That's another +1 Let the option program do all of the heavy lifting

If I could express myself really well, I'd write the above. +1

Let's ignore the discussion of whether adding a backspread is good protection and just focus on the equivalence. Do you realize that a covered call is the same as a naked put? Ignoring dividends and carry cost: + stock - call = - put For ease of discussion, consider one August...

I think that the one who has the edge is (C), the one with good timing and selection.

I don't wanna know what's in his shorts...

Yeh, I do them for earnings situations where there's inflated IV and horizontal skew. They tend to be ratioed in order to distribute the P&L graph more to my liking. Tho it was a reverse calendar spread or sorts, you can get an idea of some possibilities by taking a look at bebpasco's...

That would be true prior to expiration. For what happens at expiration, read what Martinghoul wrote 4 times :)

Yep, it looks like a strangle until you reach the strike with the lower number of options. Assuming my take is correct that you are attempting to implement the above in order to hedge your long equity position then use your equivalents to turn the stock position into a backspread: -1 20...

You can't have your collar and like it too. If you want the insurance component you have to limit the gains. If you don't want to limit the gains then just buy protective puts. The only way to give yourself more upside room is to use LEAPS where the embedded cost of carry makes the call...