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Let me guess at how software that draws risk graphs do it for positions that have legs that are not expiring. It is only necessary to be able to do this for a single leg since the risk graphs add. For a single leg, you assume the current IV of the option and use it as the volatility input to...

When all options of a spread expire in the same month, the risk graph at expiration consists of straight lines. If some options expire in later months, some or all of the graph, at first expiration, has curved lines. How is the graph generated in the latter case? Is there a variant of the...

It just occurs to me that maybe there is a way to compare spreads on the same underlying, providing they match in both the number of short and the number of long options. I hope the readers of this thread will take the challenge of tearing down ths idea. You can compute the IV of any set of...

MTE, it isn't all that clear what analytical tools Chartbender gives you and how useful they are. But since they have a free trial, maybe we should find out. I should correct what I said above. I think that change in P/L due to IV means that you are fixing the time, underlying price and...

So as I thought, there is no single variable with which you reliably compare two spreads. I have noticed a website where they claim to have a novel approach to finding good entrances and exits to a fixed spread. It is called chartbender.com and this is what I can gather from the BS (not...

You can always compare the IV of two options, on the same underlying, in order to have a good idea of their relative price and try to cook up a reasonable spread where the option(s) you sell has a higher IV than the one(s) you buy. However, AFAIK, you can't compute the IV of different spreads...

Really, Mr. zreg? I haven't read back to page 1, but it seems to me that if you are correct, IB should be more profitable than the brokerages that give the customer a reasonable chance to do his or her's own liquidation. You have evidence for that?

Mr. def, I don't understand the IB liquidation philosophy. My current brokerage, Ameritrade, allots you a certain amount of stock and option buying power. They will go to zero, and you can't make any new purchases, if you get a maintenance or Reg-T call. Then you are given up to several...

Now where exactly, on their website, does IB post their rules and algorithms for deciding on when and how to liquidate a portion of one's portfolio? I have considered opening an account with IB, but first I would like to know exactly which kind of trades I should do with them. Apparently it is...

Is there any site, online, where there is a comparison of margin call/liquidation policies of online brokerages?

Just a simple question. I don't trade box spreads and most of my margin calls at Ameritrade come from short puts or long calls getting assigned. This usually happens to me, right after expiration Friday, and I appreciate being able to fix up my account, myself, during the following days...

This thread makes me appreciate Ameritrade. They give me 4 business days to fix any margin call

Is there any way to use IV and Greeks when trying to construct a time spread with options from two different underlying futures contracts (same commodity).

I would be very interested in hearing reports, especially a comparison with IB. Thanks.

A few years ago, as a result of sending in my phone number to an email offer, I ended up on the phone for half an hour or so with Mr. Ansbacher. I didn't take notes and didn't know as much about options then, as I do now but here is what I think I remember him saying. 1. You make over a...

RayBridges, you understand what I want. If you look at the time/price graph of an option (you see them at profit.net or optionsxpress.com) they seem to be much more volatile than the underlying.

I don't think the Greeks work any better than the various indicators that stock and futures day traders stare at all day. For those in the dark, the former are related to option pricing formulas which give a guess for an option's fair value (FV) at a point in time, as a function of the current...

:confused: IV doesn't relate to the option??????????? Now I have heard something really new. :D

I wasn't talking about a tool. I think all the data you need to do it is available from sources like profit.net or optionsxpress.com. I am looking for an intuitive meaning for IV. I think the "traditional" meaning for it, you mention, is a stretch. Characterizing it as what you get by back...

A bit unfair. We all take on even more lopsided ratios when we go on an airplane or eat in a new restaurant. You can't just compare the best and worst results. You have to estimate the expected value of the return.