You cannot insure the original risk/reward ratio. Once you add options to the equation (or any sort of hedge for that matter) you change the...
If your only purpose in limiting overnight gap risk then the most efficient and cost-effective way of doing that is more likely to just not hold...
Generally, you want the collar to be a zero-cost one, which means that the premium you receive from the call sale covers the premium paid for the...
Forget about vertical and just search for collar. The position basically consists of a long stock, short OTM call and long OTM put. For...
Generally, yes, but it depends on your broker's cutoff time (i.e. the time by which you must notify your broker whether you want to exercise or not).
The original post was the best October for Dow Jones Industrial Average.
Just a side note, deep ITM European-style puts trade below parity prior to expiration due to their nature, so maybe you didn't go low enough below...
See here.
What he(she) said. :)
No, as mentioned by dragonman.
I'm pretty sure SPX options are more liquid than ES. Also the screen market in SPX is generally very wide, wile the actual market (i.e....
80-100% of the premium.
Generally, I put them on as a single spread order, however occasionally I may split them up, depending on market conditions. My stop-loss...
Actually, you are wrong. The OP wants to profit from the change in the spread of the implied vols at the two strikes (i.e. skew) and he/she...
I bet the OP is using Google translate. :D
You should read "Option Market Making: Trading and Risk Analysis for the Financial and Commodity Option Markets" by Baird. it should answer a lot...
In addition to what has already been said, with a prime broker you can have multiple execution brokers. For example, you may execute trades with 5...
You can't really make a general statement like that since it really depends on the situation and goals for a particular trade.
It's called leverage. The further OTM you go the more leverage an option has.
If you overleverage then you can blow up even with the most conservative strategy in the universe.
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