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Let us say I bought a 12 - 13 call spread on BB. At the time of the trade, BB was ~ 12.50. So I buy the 12 call and sell the 13 call, both to expire on Jun 19. Over the life of the option, the stock zigs and zags between 12 and 13...going as low as 12.10 and as high as 12.90 and settles at...

I cannot figure this out. I know how the PnL graph looks, but is the trade long volatility or short volatility. I am trying to figure out if it is a good trade to have, going into earnings.

Thank you. The 12 strike(delta = 63) has IV = 44, the 13 strike (delta = 44) has IV of 47. So, you are saying that because IV is more for 13 strike, it is going up more? As the underlying continues to increase, is it possible to say if the 13 call will lose more than the 12 call will gain?

With Blackberry (BB on TSX, not BBRY) at 12.30, I entered the 12 - 13 bull call spread, paying .86 for the long leg and getting .40 for the short leg. Now BB is inching up to 12.50...and it is a bit odd that the long leg is gaining less than the short leg is losing. After all, it is a bull...

Maybe I am wrong, but this is how I calculated: Initial long:152 * 22 = 3344 Initial short: 95*44 = 4180 Current long:152 * 82 = 12464 Current short:95 * 132 = 12450 Profit on long: 12464 - 3344 = 9120 Profit on short: 4180 - 12450 = -8270 Total profit:9120 - 8270 = 850

Thank you.

Please consider this scenario: Stock is at 20$. I short the 20 put (1 month to go) for 0.25 , hoping for a bullish move. Stock goes up to 20.20 quickly, so assuming a -50 delta, the put goes to 0.15. So I purchase the 19.50 put as a cheap insurance, for... let us say...0.05. SO I have a bull...

Thank you very much dolemite and sonoma

Thanks. Will it always be possible to close before expiry...considering deep ITM options can have liquidity problems?

Is there a way to extend the put call parity synthetic relationships to cover multiple strikes? For example, I always hear that a covered call is a synthetic short put. Does that statement only hold in this case: Long stock at 100, sell 100 Call = short 100 Put Or also in this case: Long stock...

Did you mean this guy? http://www.amazon.ca/The-Volatility-Surface-Practitioners-Guide/dp/0471792519 The title says 'practitioner', but looks too academic. I will read natenberg,mcmillan,sinclair,baird,cottle before reading this, if at all. I love Cottle because of his focus on actual...

I recently legged into a USO may 22 put butterfly (+1*19 -2* 19.5 + 1* 20) Can you tell me how this position will look at expiration? Is my understanding correct? 1. USO > 20 --> All puts expire worthless ...I should not see anything in my account on Monday 2.USO = 19.25 --> Get assigned on...

Thank you all. Will need to reread the book. It really is one of the hardest books I have read.

You get assigned on the short put and exercise your long put to get rid of the stock...hopefully keeping most of the 5.00

Let us say with the underlying at 100, I bought the 100 - 105 bull call spread for a debit of 3.00. Now, if underlying plummets to 90, the value of this call spread will probably be close to 0. In this case, can I complete the box by selling the 105 put and buying the 100 put to recoup some...

Is there a way to find a free copy of Charles Cottle's Coula Woulda Shoulda and Position Dissection books on the internet?

Charles Cottle improves on the traditional zero cost collar like this: 1.Buy stock 2.But OTM put 3.Instead of selling an OTM call to finance the put, sell as many as necessary OTM call spread verticals to finance the put or generate a net credit. But how to manage this position if the...

Why is the IV of the BBRY call options with only 2 days to go so high for ITM and OTM options? Should not less time to go imply less volatility, since there is less time for the stock to bounce around?

"If you hedge you will make a little bit of money if the stock goes in either direction". Thanks. Should I not make more if the stock goes up 5%, then down 5% as opposed to it just keeps going up.? I am talking of the case where I hedge.

It is possible that it is mispriced. You should probably look to capture the arbitrage profit of 8.52-7.50= 1.02. Exercise all or part of your 50 calls, buy stock at 42,then turn around and sell the stock at 50.52. I took a peek. 7.40 was the last trade ,possible before it closed at 50.52. If...