Search results

In general, when you buy options, your losses are limited to the debit you've paid. However... Let's say you've bought the 100 call in ABC for $3 - so theoretically, your max loss is $300. Right before expiration, ABC is at 99, so you say "ah, screw it!" and walk away from your screen... and...

Even when Friday is not dead, and I see what looks like a good trade, I'm somewhat unlikely to enter - especially toward the latter half of the day. I might be able to scalp something short-term if I open one in the morning, but exposing myself to that weekend risk for nothing? No thanks.

I don't know if I'd call myself a more experienced player, but the OIC (Options Industry Council) has a clear statement about it: "Pricing models take into account weekends, so options will tend to decay seven days over the course of five trading days."...

Heh, thanks. I do tend to pick things up fairly quickly - but then, I've spent my entire life learning and teaching, refining critical thinking skills, and looking for challenges. I've only been trading - hell, doing anything with finance, after a lifetime of total blindness in this direction -...

That's only true at expiration. The volatility smile has some surprises for you before that point. :)

There are a few reasons: 1) Because the price could drop even further, resulting in reasonable call credit being out of range (unless I wanted to sell below basis - which I certainly don't); 2) Because, in my (admittedly limited) experience, stock prices in large caps usually take "the stairs...

Just to follow up: AMD kept rallying today, so I spent the last few hours tracking the premium and watching the greeks, then closed the trade when it peaked for a $77 profit. Interestingly, even though I expected the premium to start rolling off below the sold strike (85), the roll-off point...

If it was, that would be where my cheap long calls would come into play: if I was short the 20 call, I'd be long somewhere around 50. Sure, I'll take a loss, and it will sting - but it won't be an account killer. (For @Overnight: sure, you could call it away from me at $20 when it's at $10k -...

I don't feel shamed - that would require me to hold your opinion in some degree of regard, and I have no reason to do that as yet - but I don't appreciate the useless snarkiness. As to saving me money, the simplistic statement of "you don't have any experience, close your trade now" is of zero...

Well, "nobody"... that was the question in the opening post. You chose to play shaming games and practice unlicensed and unasked-for net.psychiatry, just as you're doing now. A number of people responded, and most tried to help to whatever degree they could; yours stood out as containing nothing...

Brother, you've called it. This is exactly why I'm trying to plan things out ahead of time, before I get hit by something like that. (To be precise, I did buy a junk call when I sold that one; I've taken what some of the more experienced folks here said to heart, and don't do pure naked calls...

That's quite destriero-like advice... I like it! :) In fact, it reflects my take on the trade quite well; both are pretty much neutral right now. And given the rally, perhaps I should think about doing something to make it more positive. Is that a reasonable take?

Trying to understand the pros and cons of the available choices. That's much more difficult than just hedging or trying for more profit - but that's my main goal in trading for now (and for some years to come.)

Yes. Am I supposed to be ashamed of that or something? What purpose was this supposed to serve? If your point is that no one should trade options without experience, perhaps you should draw a flow chart of how that should work and ponder it for a while. Me, I'll keep on trading small, learning...

Well, it's cash-covered rather than naked, and a calendar rather than a straddle - and I'm OK with holding the stock and selling calls on it. In fact, I only sell puts on underlyings for which that's true. Given that, I'm not sure why it's "not smart" (not arguing, just trying to understand.)...

It's a calendar, actually; the call is 30 days out while the put has 9 days to go. The P&L is right around 0. It's not any kind of an emergency, and I don't need rescue :) - more than anything else, I'm trying to learn different ways to think about and manage positions. Not unreasonable; I...

I'm looking at a strategy that seems to make sense, and wanted to bounce it off the smart folks here to see if I'm missing something. All input is welcome, and appreciated. About a month ago, I sold a put on an underlying that dropped like a rock right afterwards. Since I'm OK with holding that...

It's taken me a while (and, um, actual trading experience; bleeding from losses, and paying for mistaken ideas...), but I've come around to seeing it this way. "Repairs" or "rolling", as most people think of it, it a cutesy way of hiding losses from yourself - and taking on more risk in the hope...

Unless I'm misunderstanding your entry, you don't have 8.80 worth of risk in a $10-wide credit spread with 5.26 premium. Your max loss is 4.74/share. If you're looking at an 8.80 debit to close, reduce that by the premium you got; this leaves you 3.54 down. It's not something to throw a party...

There are always government jobs. I just drove from Colorado to Texas through New Mexico, and all three were advertising for correction officers/prison guards, starting at about $20/hour. You get to release your frustration over having failed as a trader by brutalizing people... sounds like a...