Search results

Are those regular puts or monkey puts (sic)??

I don't know what others would consider as an option "pair" but to me, selling calls on "B" would not be a substitute for the short leg of the equity pair. You would buy calls on "A" and buy puts on "B". With a large move in either direction, the winning side goes toward 1.0 delta and the...

Your issues are limited capital and inability to obtain margin. Transaction costs are not an issue because with equities, slippage is less and at most deep discount brokers, so are the commissions. As I see it, the main problem is that if you use OTM options, you layer on more obstacles...

Well silly, once you know that, you consult the Max Pain theorists! :)

I don't think that option traders can predict anything. They can take positions that will make money if their volatility guess is right, but predict??? One thing traders can do is utilize positions that take advantage of IV levels. An example would be pre earnings spreads where the near...

The whole idea with utilizing options with pairs is to be able to limit the losses. Hopefully, the yield cededwill be much less than the principal lost when a pair blows up. The paper trading account is a good idea. I opened one up a coupla months ago ths ago but have been too busy to...

Ayyyyyy don't think so. There's nothing in a chart that reduces time decay. Time decay is constant. Going OTM just means lower premium paid per contract and if you ramp up the number of contracts in order to get more delta, you're swilling more slippage and commissions, you're increasing the...

I've done a lot of pairs trading and have wondered the same. On my "to do" list is to download some historical data on a number of issues to see how well this idea holds water. I use IB and thier option comm sched is slightly higher than for equities so there's no advantage there. Another...

You can turn a long position into various spreads or even the other side of the synthetic. You can roll a profitable long leg up, down, in, out.

I think the main reason that more do not 'write or sell' options is because the 'average Joe' is unsophisticated and doesn't understand the vehicle. Huge cash isn't needed to write/sell uncovered options because the margin is lower than for buying/shorting stock. If you have enough capital for...

Keep in mind that 50% of the people that you know are below average :)

What ever happened to "It's better to give than to receive" ? :)

I's promises to uses the S whens typings the words LEAP

Volatility is an issue when you're trading it :)

Yeh, it is a dead horse :) The John Summa article that Tom1am posted pretty much sums it up. The LEAP is a lower cost surrogate and has a smaller loss potential if there's a big drop. It underperforms the underlying to the upside due to the time premium paid (comparing $$ gain on 1 LEAP vs...

For a mere 4 easy payments of $995, all here will be glad to be of service. If you choose me, for free, I will throw in a pre opening check list for how to start the day... everything you need to know about exercise, phone screening, what to eat, what to wear (optional), power naps...

:D :D :D

Long options: Limited cost/loss Lower margin Leverage Lower delta so less bang for the buck per underlying $ move Change in implied volatility (may help or hinder) Time decay erodes your position Timing: they expire

The Federal Reserve's Reg T determines margin. Stocks can be bought (or sold) with an initial margin of 50%. There's a formula for selling naked options. For ease of discussion, it's approximately 20%. You must have a minmum of $2,000 in cash or equities for a broker to extend margin to...

What a tangled web they weave... I found some links last night about the tender offer. I'm trying to figure out if you get a free GM or Chrysler car if you trade these issues :) http://www.citigroup.com/citi/press/2009/090726a.htm http://www.citigroup.com/citi/press/2009/090723a.htm