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I'm not familiar with the futures markets so just generalizations offered... Short straddles are for non-directional underlyings. Period.

The Risk/Rew is somewhere b/t 2:1 and 3:1. You can't assign a maximum risk number at some arbitrary point. The debit cost is the true risk.

Option margin is approx 20%. Equity margin is approx 50%. So if assigned early, you either need to pony up the extra margin in order to carry the position or you'll have to close the equity position if your broker doesn't automatically do the latter immediately. Options are not likely to...

As several have stated, a covered put in one account and a covered call in another nets out to be a short strangle. What's so whacked out about this is the margin for doing it this way. For example, the margin for selling a naked 75p/125c strangle for 2 pts on each side is $1,000. Do that...

How does Bobo Hobo, a penniless bum with no fixed abode get Level 4 approval for writing naked? (Level 4 is the highest approval level and usually requires demonstration of experience as well as a sizeable account to satisfy the broker)

Very few people get rich quick but with a lot of hard work, some can make a nice buck trading.

The only way these scalps can make money on the equity side is if the stock reverses and he recoups the paper loss. If it doesn't, the now directional equity side starts net losing. If you understand options, the delta of the short option losing value is dropping so he's getting a small...

Now there's a perfect description of this " " "edge" " " LOL

Not quite. The margin on a naked option is appriximately 20%. The margin on stock is 50%. That's 2-1/2 times higher. Don't agree? Try the CBOE margin calculator: http://www.cboe.com/tradtool/mCalc/default.aspx

The only subtle advantage is that with credit spreads, no closing costs if options OTM at expiry.

Small details... with higher IV and/or more time remaining, both legs could be ITM initially. And prior to exp, OTM spread can get there even if UL doesn't reach either strike. There's never an easy answer with these generic questions :)

The margin for a naked option position is lower than for an equity position.

Either you misunderstood what he's doing or he's smoking you about his strategy :) If you're long and short the stock at the same time in different accounts, it's a wash, meaning that whatever the stock gains in one account, it loses in the other. Carrying two stock positions ties up a lot...

Out of sight risk for a vertical spread? If the reward of a vertical is 100%, it means that the premium is 1/2 the difference of the strikes. It doesn't matter if it's a credit spread or the synthetic put spread. The margin and the reward are the same.

If you acquire substantially identical replacement shares 30 days before/after a tax loss sale, it's the loss that is disallowed for the current year and carries forward to next year. IOW, you pay more taxes now. How do you figure that a wash sale is going to achieve long term gains?

Interesting concept. The change in put value is less if the stock goes up or down.

If you don't understand more than the basics, don't be in a rush grasshopper :). Paper trade.

Mea culpa John - didn't realize I was being a party pooper :) Happy holidaze!

Holding until expiration means take a vacation. Visit Rip Van Winkle for a month. Recover from a coma. Get released from incarceration :). Return for expiration Friday to deal with the position. Now your options are either at intrinsic or worthless. Does it matter that while you were...