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Corporations issue preferred stocks for a number of reasons. There are income tax advantages for corporations that are not available to individuals (dividend received deductible). Rating agencies give prds better equity credit than on straight debt. Pfd issuance avoids diluting common shareholders.

I've read all of your posts in this chain and to repeat, your initial premise is faulty. Stock ownership is not a Ponzi Scheme - nor do I believe that you understand the difference. There are many investments that do not provide an immediate return and are based on the perceived value of the...

Most preferreds are issued at $25 and will not track the underlying quantitatively. Therefore, naked call writing on the common will not be backed by the preferred if the common soars (the risk just about as high with or w/o owning the preferred). Convertibles would be a different story. And...

First off, don't confuse "over-priced" options with high priced options. Premium rich just means high volatility. You want more premium, you're likely to get more movement. More reward for more risk. It's not totally clear what your asking. Your formula determines the amount of...

Every investment is essentially timing the market and more so with options since ther's an expiration. Doesn't matter if it's covered calls, iron condors or buying long or selling naked. It's just a question of how risky your gamble is :)

Supply and demand is not a Ponzi Scheme. In fact, based on you comments, I don't think you really understand a Ponzi Scheme. Society puts value on things. It could be stock, a farm, gold, tulips, guano dung, whatever. The price at which people are willing to exchange anything is...

Forgot to mention "OPTIONS:Essential Concepts and Trading Strategies" by The Options Institute/Business One Irwin. It's a good read for someone who's past newbie status but doesn't want to get buried by something highly technical and sophisticated. That's for later :)

I have another idea but it's probably more suited for my risk control approach - and I'm really stretching that concept with this idea :) You indicated that you own DRYS shares (currently $7.03) and you wouldn't mind buying more shares. You're coming into earnings. It could pop, drop, or...

"Options as a Strategic Adjustment" by McMillan is my suggestion.

I don't know what you're doing but the position gets you before the adjustment do. Imagine a stock at $52.50 and let's pretend that you could put on a 50/55 collar for free. Prior to expiration, if the stock drops, you'll have put gain to offset some of the loss. But on an expiration...

If an option is OTM, all of its premium is extrinsic or time premium. If its trading ITM, the premium is intrinsic (the amount the stock exceeds the strike) and any add'l balance is extrinsic. With the SPY at $109 and a premium of $5.30 for a 105 call, you have $4.00 of intrinsic and $1.30...

It depends. Assuming a long collar: If the position is near its maximum gain and there's a decent amount of time remaining, get out. It makes no sense to hold for the last nickel while risking dollars. If the position is heading south, consider closing as a stop loss or adjusting to...

If your partner's taxes are that high, I would recommend that she get a 2nd job so that she can afford them :)

In general, you want to be at a flat fee per trade rate if you're trading size and at a per share/contract rate if you trade smaller lots or tend to scale in/out. My suggestion would be to analyze your trading pattern and see where you'd save the most. If one broker will save you serious...

WHICH ONE IS MARK ??? :confused: :)

A couple of months ago IB offered a commission discount to volume traders who would use two of their trading algorithms. They also offer an unbundled commission rate that may save you some coin, depending on the size and nature of your trading...

WHEW! Thanks, I feel better. I was afraid that the mass hysteria was contagious! :)

I fully agree with Mark's detailed explanation of exercise possibilities. What I would add is that once you have determined that exercise provides a better yield than accepting a below parity bid for the call, don't get fixated on nabbing that extra nickel, dime or more while ignoring the...

Pick one: a) Because Yahoo's typewriter broke? b) Yahoo is not a reliable source for info.

That would be a good starting point. Stating the obvious, one wouldn't sell ATM naked calls if bullish or buy OTM calls if bearish, etc., etc. A long term investor might be more comfortable with selling OTM CC's or doing a covered call spread to leverage short term upside. Someone seeking...