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1) As mentioned by others, it's commission (and slippage) intense. Not good. 2) If held for 60 days, to a point it behaves a like a long straddle - better in the loss and modest profit areas and worse if you get the monstrous move (opportunity loss). 3) I don't know what to make about the...

Did you get a testosterone infusion from this thread? :D

I hope you did some size so that we can have another musical chairs thread this weekend.

That's Baron von Tayback, the guy who started ET!

The answer to all is INDEX (it's found in the back of the book)

I'd give your post a +1 except that I'm ignoring you (wink)

BTW, I forget to mention the subsequent margin calls. I gave up a good number of stocks (liquidated to cover the margin calls) that had really impressive runs over the next few years. And who says that a good spanking doesn't reinforce the lesson ??? :D

I had two watershed moments. The first was the crash of '87 where for every stock that I sold naked puts on expiration Friday, I basically owned them on expiration Monday. The 2nd was the first time that I ever shorted a stock (it was Compaq). It was daily religious experience... Day...

It would seem to me that seemingly endless pages of back and forth clutter could be avoided if Howard posted the account balance when trades were made (they would have to be posted as well). Numbers don't lie.

Again, a fairly simple answer. If the system is vibrant enough to overcome the add'l slippage and commissions then leveraging via options is a good thing. If not, it's bad.

Naked option margin is approx 20% versus overnight equity margin of 50% so a synthetic provides better than twice as much leverage.

The answers to #1 and #3 would be obvious by observing some option chains over the course of a few days. As for #2, splitting the bid is fine for working your way into positions or trying to exit positions a stagnant underlying. But if you have to get out, expect to pay the full load.

Maybe a better price but not necessarily a reasonable price :) I think that a MM is more likely to do something with a spread order where both legs have wide B/A spreads than a single leg order but that's no more than my anecdotal opinion. It's really going to come down to size available on...

HEY! That's what I said ... or at least was trying to say. :) As an off the top of my head made up example, suppose I was trying to buy 100 AAPL Jan '13 400 strike calls and each 20 contract purchase moved the ask up a bit (UL not moving).. Assume that by the time I got all 100, my highest...

Doesn't sound like the best way to approach trading but if you're up 30% when you hit a bad trade, it's not the end of the world. No one gets every trade right. If you can net 30% every 6 months (hypothetical), musical chairs w/o a place to sit isn't so bad. Perhaps a little hand...

What's that expression about selling naked options.... ??? :confused: Ummmm .... You get to eat like a bird and shit like an elephant? :D

If your broker offers trading algorithms, using them may disguise the size you seek. They may not help if the option is illiquid since your purchases are likely to move the spread. Alternatives might include buying various strikes or selling a small amount of OTM LEAPS to offset the add'l...

There's no such animal (something that allows for future profit, costs little and caps risk). For the $108 of potential profit left in the position and given that expiration is August, best thing to do is probably close it. Now if you were bearish here, you could roll the -12 Aug 136c's down...

Stay upwind from him