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They do lock in losses: If they buy stock at $100 today and sell strike 100 ATM call for $1 for this month, then they can distribute dividend of $1 this month. If next month the stock drops to $80, they can only sell strike 80 ATM call for $0.8 next month, and they lock in loss of $20 if the...

Many of us have a main profession (like teacher, doctor, lawyer, engineer) and we do trading on the side. But I spend as much time doing market research and trading as my main profession, I want to register as a professional trader, and I want my losses to be completely deducted from my profits...

Those covered call ETFs that sell at ATM in my opinion are unsustainable because if the stocks drop, they lock in losses at ATM. Any thoughts?

- Front month straddle + back month straddle

With the recent meltdown of the banks and the financial sector, many brokerage firms are also affected. How financially resilient is Interactive Brokers? What is the risk of IB going bankrupt? Thanks.

My understanding is that ACTUAL options prices are results of bidding and asking among buyers and sellers, but option Greeks are mathematical constructs and cannot be traded among buyers and sellers and thus should be just theoretical values. I have a November ITM TSLA 1100 put option with a...

Okay, the second issue was due to wash sale.

I thought about that too. It appears that my cash amount decreased by similar amount, but not exact.

(binary options) =~= (flipping a coin) + economics + (tech analysis)

My ITM short puts on TSLA at strike 1200 got assigned. But on the TWS quote monitor, it says my average trade price is 1159.61 rather than 1200. I called IB but they couldn't tell me why. Last week I sold 5 put contracts of SPCE at strike 14, and the trade price was 0.09 and the average price...

Well, the extended trading hours end at 8:00PM EST. So, after 8PM EST, we will know if the options will be exercised or not; we don't have to wait till Monday, do we?

According to CBOE, the equity options stop trading at 3:00 PM EST on expiration Friday. http://www.cboe.com/products/EquityOptionSpecs.aspx Here is my question: If, for example, I have naked puts and they are OTM by 3:00PM on expiration Friday and options have stopped trading, and if...

No entirely true. I have developed my own technical indicator: San Francisco Weather. If the SF weather is sunny and pleasant, the the market is up, and vice versa. Last few days it had been cold and rainy in SF, so the market is down. Today, Sunday, it gloomy and cloudy; so, there may be more...

Well said !!!

Looking at ES June quote, which is 1130.50, I did a simple risk-free interest rate discount assuming r=0.0025 and 150 days approximately. I get 1131.68. Either everyone is thinking S&P will drop, or my calculation is wrong; more likely the latter. Comments?

You think "Fed is part of US govt?" Wake up, America !!!

Read the book in college years ago; read it again about 2 years ago. Market is essentially efficient; occasionally arbitrage opportunities occur, but often not for small investors to profit from. Technical analysis is astrology at best, in my opinion. Another author also wrote an analysis on...

A typical scenario: a 5-point vertical spread trading at 0.25; If you short the spread, you receive 0.25 credit; the odds of payout are 1:20 (if you win, you are paid 0.25; if you lose, you are down 5); If you long the spread, the odds are reversed. Now if you have 0.9 probability of...

In hindsight, everything is clear. Could you have predicted on Jan 2 that Google would threaten to abandon Chinese market? The sharp increase in call value was partly due to this event, and I bet most people who longed calls before this event did so for reasons other than the Sino-Google dispute.

The world is round; there is no center!