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There are probably a lot of bag holders hoping to make back the $50 they lost in the '07-08 fall by writing OTM covered calls. :D :) :p

Good point. C is a poor candidate because its intraday volatility is lousy but if a stock is < $5, it's a better trade it than its options.

Last price quotes can be stale. For illiquid options, they may not correlate with current price of the underlying. Determine the natural price of the spread for buying and selling (B-A and A-B). A reasonable order is splitting that. Asking for a little more on a sale or a little less on a...

What you're missing is that you're mixing things up. Your topic title mentions the profit-loss ratios of spreads versus nakeds (long optons) but with your math you calculated the risk ratio of a long 16p to a long 12p AND the same for a long 16 put long to a long 12/11 put spread. Where's...

Decades ago, the norm was to call any single option position naked and clarify it with long or short. Today, the norm is that a naked option means short/ uncovered. So if you put a bunch of old timers and noobers in a room with cocktails, they congregate separately so they can understand...

I traded EA's heavily for several years and net net, was profitable. I had no ability to predict how far and how much the underlying would rise/fall nor the magnitude of the IV drop other than it was going to drop, usually a good chunk of the pre EA expansion. The edge that I had was that...

Clearly, I need to increase my negativity :)

IB charges 70 cts per contract (less if it's 5 or 10 cts) and I think 50 cts if over 10,000 per month. There's probably a lot of cancels in the $9.95 you're paying. They offer an execution credit and AFAIK, it's higher than the cancel fee so you might find that the cancel fee has less pinch...

I'll check it out in the morning. If I find it, I'll remove it from my linked Excel spreadsheet. Thanks,

How is the position + delta? And in your subsequent reply you stated that it's not worth the effort as you will accumulate deltas rapidly on a decline. Doesn't compute.

I'm not familiar with treasury futures or their options so I may be assuming a lot. Be that as it may, your quotes seem bizarre to me. How do you get 9 more pts of premium for a strike only one point higher? Bad quotes or some multiplier involved? To answer your question, check the deltas...

Where can that be found on IB? I looked but couldn't locate it. THX

If the market isn't down on Monday "because of today" then it's very likely to be up. :D

In order to get 10 OTMs for 1 ATM you have to have some combination of low IV, short time duration or wider strikes. With that plus the slippage, commissions and possible IV decrease, that means that you're going to need more than a slight move to just break even. Like all option strategies...

116 breakeven is at expiration. Prior to expiration, you're losing 2X lower delta of short 117p while making 1X higher delta of long 118p. The position is net negative delta so if it starts dropping tomorrow, you're underwater immediately, possibly never to see breakeven.

A lotta stocks trade by appointment.

With a trading desk like that, it's TIME TO BUY shares of Goldman!!! (ROFL at the previous replies)

Actually, I didn't ask. I just stated that option margin is approx 20% versus equity margin of 50%. Somehow that turned into an explanation of how to build a watch... and I wasn't even asking what time it is. :)

I see. If you can't do it then it can't be done. Got it.

It's a lotta BS, ya know? Input first set of numbers. Decrease 1 day. Compare 1 day chg to observed change. Decide what that means. Input 2nd set of numbers. Change to IV of first numbers. Compare 1 day change to observed change. Decide what that means. Somewhere in there is...