Sigh. By choosing to trade a less competitive product like SPX, you receive less compensation for the risk you take. Indeed, after that...
You cannot rely on past experience when trying to estimate risk in the future. How do you KNOW that 5 adjustments or more might be needed in the...
It is absurd to choose to receive less compensation for taking on the same risk. But that's exactly what you're doing by trading a less liquid,...
No, IB does not. This is one of the major shortcomings of IB, imo.
No, I did not say that you had 100% of your total capital in credit spread. But I HAVE seen your spreadsheets. The way you calculate your...
Past profits have little to do with future returns--you should know that. Your 5% returns are based on the width of the strikes. One major loss,...
I was referring to the paying 25 cents to buy back a deep, deep otm spread and then getting 15 cents back to sell a spread that was less otm. You...
If one is selling X number of atm straddles and selling X number of credit spreads, then, yes, the risk is much less with credit spreads. The...
If it were impossible for the market to trade at 1180, the market maker never would have bid on the options you sold. Unlikely, yes. Very...
If the SPX somehow gaps to 1180, the earlier, now closed, spread is still a (small) winner, but the new spread is a huge loser. It is unlikely,...
Wonder if the CBOE will have two sets of options trading during expiration week: the monthly options that have one week left, and these new weekly...
Of course it's ridiculous, but I guess they're afraid of having clients "naked" options. Needless to say, I do not recommend Scottrade if you...
That you locked in a profit is nice, but it is really not germane. What counts above all here is risk and the reward for taking on that risk....
The positions are certainly different. The one that was bought back for 25 cents is less likely to be itm than the one sold for 15 cents (not...
That excerpt was from O'Connell, THE BUSINESS OF OPTIONS. The rest of the book is OK.
Nah--he's just from Philly.
I wouldn't sell teenies, but the point in BUYING such cheap options, at least for those who sell options, is to close out a profitable position....
If JJC is fortunate to have the stock rally or "spike" (whatever that means) right after he buys the calls, he could lock in a small profit, if he...
Note how he really does not define his terms precisely--he is probably being intentionally vague so he can't be pinned down. "Spike" can mean...
The funny thing, is that Scottrade allows covered calls, but selling cash-secured puts--no way. Is that silly or what? Needless to say, I...
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