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Yes. This is accurate. I was told it was a sudden overnight decision, and that no communication was sent to IB customers. The trade desk can close your existing positions. I was not that happy about it and had the following exchange with a Rep on chat this morning: IB Rep: I know. It's...

Check the price of the put option on the same strike in relation to the dividend. Owning the call is like owning both the stock and the put, right?. When the call holder exercises, he will be left with ONLY the stock. So by exercising, he has essentially forfeited his put in exchange...

Since the title of this thread is: "Profitable, professional options traders", I forgot to mention in the last post: Most professional options traders don't learn the skills/trade from a book. They have been taught, either in a specially designed program for new recruits at their firm/bank...

I haven't looked through option trading books lately, but here goes: Volatility Trading by Euan Sinclair is very good, but a reader would benefit from having a foundation first. Natenberg's book, while certainly dated, still has some value due to its point-of-view. The theme of the book...

Gustaf, Why do you think that it will work well for covered calls against your stock portfolio? I would argue that it will not work well for portfolios that contain material option exposure (puts or calls). Example: How many one-delta puts with 1 penny of edge do you think your...

Using Markowitz optimization on a portfolio of options sounds too scary. There are more dimensions of risk to worry about besides just movements in the underlying. Also, while stock returns themselves don't actually follow the normal distribution, option portfolio returns REALLY don't...

It depends somewhat on why you can't borrow stock. Nobody can get stock? Or you personally are not in a great position to borrow stock, because your broker is not great with locates/rates? The calls you are looking to sell will already be cheaper than they would be under normal put/call...

There should be some decay over the weekend. News can happen, etc. So the transition from Friday Close to Monday Open should not be continuous in PRICE. Would you rather buy an option on Friday at 4pm or Monday at 9:30am if the price were the same? The IMPLIED VOLATILITY that is...

frost - Trading ITM options for leverage is not a great plan. The transaction costs are just too large compared to the DOW 30 stocks which are very cheap to trade. Just trade the individual stocks - and if you can't take positions in every signal, it's not a big deal. If your strategy...

tonyc - What is your average holding period likely to be? Unless it's a really long period, and there is something about your strategy that also predicts upcoming volatility, then trading futures sounds better by a wide margin due to transactions costs. But why not just trade the ETFs...

You'll end up with 717 ANR shares, $7000 in cash, and some extra cash in lieu of the 0.5 share.

The borrow has loosened up considerably in LNKD. Still 20-30% though. I am not aware of any arrangements for small traders that allow them to lend out the stock. Does anyone know a broker that pays a portion of the lending income to the holder? I figured that would only apply to very large...

Since the market is zero supply, some other investor is short the call option that you are long. He is long the underlying (stock or coupon bond) as a hedge against his short call position. If the optimal choice is for the holder (you) to exercise the call option, he is expecting his position...

IB's rule seems to outlaw buying a Bullish call vertical !!! Buy 100 BAC 30 calls. Short 100 BAC 35 calls. According to (NA2), this is not allowed because the 35 calls are uncovered. Nobody took 5 minutes to think. This is absurd.

IB posted the following bulletin this morning. Their interpretation of the rules does NOT seem correct to me. Our other broker does not have this interpretation either. Does anyone have any idea who is right? -------------------------------- Interactive Brokers Bulletin Board...

The stock is in the low 20's, very far from your 35 strike. Think intuitively. Ignoring interest considerations for the moment, how much different is holding your put option vs holding short stock? The main difference is that the put does better if the stock goes back up through 35. But...

It has been a few months since this thread started. I was wondering if anyone had more positive things to say about optionhouse. Also, does anyone know if they will negotiate long/short rates for someone trading say 50k contracts per month? I heard they pay no short interest which locks...

Hi. I trade through Interactive Brokers. Is there a way to get NYSE MOC imbalance data right in a column in TWS? Does IB even get the feed from NYSE? And if not, can anyone recommend a reasonably priced source for that data feed? I posted this on the IB Customer Forum. No help there...

By closing the position, I assume you mean: Sell the puts. The problem with that is the bid price. I can't sell them for parity. If SPY is trading 138.75, for instance, the 142 puts are 3.20 bid. Not 3.25 bid. So it will cost be about $5 per contract plus commission to sell them.

I actually don't care about the risk of being short $2.5mm worth of S&P500 for a day. It is a hedged position, anyway. I only care about quirks in the way IB settles the options that might be expensive.