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If you're just focused on single calls rather than the effects in different structures, think about the delta of these calls for a moment. If the ATM call is 50D and the FOTM is 5D, then the first will gain 0.50/share for each point while the latter gains 0.05/share. Gamma is also highest ATM...

They're highly correlated... but yet they have significantly different IVs? That doesn't sound especially correlated to me. Since your broker is probably unlikely to agree that this constitutes a fly, you're now going to pay the full monty in buying power reduction - i.e., have to put up the...

Looks like 0.30 from here (but the ask was probably a penny higher.) Also, note that the bar is a doji - it only ticked down to 0.30 and went right back up. I wouldn't be surprised if only a few contracts traded at that price. You should call TD and find out, but I'd guess someone was ahead...

"I want to be a doctor, but I don't understand all this "anatomy", "physiology", and "pharmacology" stuff. Can't I just pick up a scalpel and start cutting on people?" :) Well, you could - but there would be negative consequences. To put it mildly. If you want your patients to live, and...

Thanks, I hadn't heard of STIRs before. Always something to learn in this business...

I've been doing pretty well recently trading the downside, but I'm curious: other than, say, buying I-series bonds, how would you go long inflation? I'm particularly interested in any options-based approaches.

You can always treat it as a math problem: just take the second differential and look for the "knee". E.g., there's a 700-pt drop between 2 and 3, a 400-pt one between 3 and 4, one that's ~200 pts between 4 and 5, etc. Decide what level of risk (the rate at which you get kicked out) vs. return...

"Hello, police? I'd like to report a vicious stabbing in broad daylight..." :D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D

Some people define the word "gentleman" as "someone who would rather be a dead lion than a living jackal." I mock those fools, because the only rational choice is to be a living lion. By the same token: if presented with the "choice" of being a scummy millionaire vs. "broke but honest", my...

Don't forget those sweet, sweet recurring payments - only $99.99/month, just enter your card number right here! If, say, 50% of the suckers who bought that "course" sign up, that's right next door to $300k/year - and all you have to do is maintain a line of convincing patter (and, of course...

And if you live your life as a damn fool who trusts every glib jerk with his money, for sure you'll never make it either. (Feel free to figure out how much, or if, either of those descriptions fits you.) Let's turn this around: say there are 10,000 trading "gurus" out there (sure, there's a lot...

In some cases, hitting an exact entry price doesn't matter all that much. E.g., if you're trading reversals and you see a hard pivot, the key element is time; you need to get in right now, regardless of the price. In other situations, it's critical: if you're buying $1-wide flies and looking for...

Yeah, I'd been wondering if I was misreading something. Especially since several knowledgeable folks had already answered this as if the basic premise wasn't broken to start with. OTM = extrinsic value only. And assignment risk only - or at least the majority of the time, with some notable...

You can also exit a short put position early for a profit (in fact, that's part of my normal process - time in trade vs. return percentage), or close it for a loss to avoid exercise. No matter how hard you stare at it, there really isn't any huge, glaring difference between CCs and short puts...

A short put with the opposite delta in the same tenor will give you the same return/protection without tying up nearly that amount of capital, with the dividends already baked in.

Sure, you'll earn $116. To do so, you will be tying up over $40k of your margin. Meanwhile, a short put in SPY at about the same delta will pay the same amount while only requiring 1/5th of that - meaning you could trade 5x as much for the same account size (it wouldn't be smart to leave...

That's a covered call, not just a short call. Big difference. And no, 100 SPY @ 408.84 is not the worst case; that's your cost at entry only. Say SPY goes up, and you get assigned at 410 (41000 credit) with the spot at 450 (45000 debit.) You got 3160 for the short call, so you're out $840...

If you're short a call, you don't want the market going up. Say you're short at 400; if it expires at 450, you'll pay out 50 x 100, for a $5k loss per lot (less premium received, of course.) As to buying a put lower down - it's going to be OTM. What use is that supposed to be? The only winning...

As you go DITM, you're increasing the probability of the underlying being called away. Is the thought of being short SPY attractive to you? I'm trying to imagine in what way this could be called "safe" or "conservative" and failing.

POP is inversely proportional to max return - this is pretty obvious given a simple thought experiment (you have a 100% of making $0; anything greater than that has a lower probability.) Also, given the basic mechanics of spreads plus the fact that POP is calculated as the probability of making...