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Good explanation. I think that now, I understand what I was saying :) OK, I've had a nap and it all makes sense... I should probably stop here :) Given that: Stock + put - carry cost = call (assume no dividend) If we're looking the 180 options with IBM at 100, would it be fair to say...

I took call positions in all of these yesterday. I have Mr. Peabody's "Wayback Machine" in my Simulator :)

SFO had a good article about this a few months ago. I'm going to see if I can dig it up and figure out how to scan it.

OP, what you end up buying or selling via exercise and assignment is the same industry wide. It does not vary from broker to broker. The strike price determines the cost of acquisition.. If you have no previous position, in your examples, if your option is ITM and you exercise, you are...

Yahoo has a long history of containing inaccuracies and bad data. It's a convenient starting point but if you're seriously considering taking a position, reliable real time should be looked at.

Thanks for the explanation. Let me be more specific about what I meant about calls being higher priced than puts. Obviously (as you noted), the call at a given strike can be more expensive than the put or the put can be more expensive than the call due to where the underlying is (one ITM...

You're not going to find many, if any, $40 stocks with ATM calls trading for 5 cts until late in the day (expiration). You'll will not make money if the stock goes up due to the cost of the calls (same as your stock doesn't move example. But if we pretend that you could find such scenarios...

I'm surprised that carrying 800K of stock with 100K isn't a pattern day trading violation which allows 4:1 intraday. I also wonder why you were only charged one day of margin since I was under the impression that the margin was from trade until settlement (from previous whackings of my own)...

Sorry to prolong the discussion but I think that the CBOE explanation starts with a specious premise and proves nothing about options and a zero sum game: >> Myth #7: Options are a zero-sum game: in order to make money, the trader on the floor who bought or sold an option has to lose for me...

Some people are too arrogant to believe that investors can do better than their prestigious Fool Service Brokers or the managers of their mutual funds. And most people's eyes just glaze over when you present them with an alternative that might take a bit of effort.

Once upon a time, the math of BS pricing wasn't beyond me. Either it is now or my attention span is gone (g). So let's talk on my level :) In put-call parity, calls are priced higher due to carry cost (assume no dividend). If there was no carry cost, the theoretical values of puts and...

I think Spartacus's example was about a long straddle. If you're long the body of a fly, condor, etc., IV collapse hurts and vice versa.

Didn't mean to imply that it did. The OP indicated that he would gamma scalp the straddle component as if the wings weren't there. What I'm trying to suggest/imply, tho poorly, is that the notional neutral position would not be neutral due to the delta of the short strike in play. If the...

Yep, examples that work become light bulb moments. Yep, you're welcome. And for the answer to the assignment, try a +10/-7/-8/+10 ratio. That would amuse me :)

Now what happens to this (? to the OP) if you have those OTM limiting short legs? If it doesn't work with an iron fly, why would it work with a reverse fly?

That same year I saw Jethro Tull at Madison Square Garden. I should probably say that I heard them since I was in the nose bleed seats :mad:

If you were backstage, would that have been a Reverse Iron Butterfly? :confused:

1.this is not a synthetic straddle WRONG 2.its 50% cheaper,because max loss is the primium of the options,your futures are 100% hedged-no need for margin r. if you do straddle ,you buy 100% more options: WRONG 3.how can you say that theta is the same,when with the straddle you...

What's the definition of "very profitable"? If you're gamma scalping, the stock portion is going to negate some of the gain on the long straddle component while you lose on the short legs. You know, that problem that IV_Trader mentioned about gamma scalping a non linear curve ? And how...

You have a reserved seat on the Merry Go Round :)