With American-style options, the option can't be worth less than intrinsic value. That's because if the cost of carry of the option becomes too...
Spin, I think what you're saying is that if IBM is at 100, then the 100 call will be more expensive than the 100 put due to cost of carry of the...
Let's go back and remember that an option is the sum of two things - time value and intrinsic value. Spin, the call at a given strike can be more...
To the contrary, put-call parity is based precisely on the fact that a put and a call at the same strike have the same vega, the same theta, and...
Why is theta different for calls and puts? Actually, the call and the put at any given strike are identical except for their delta, which is the...
Unfortunately, you're not the only one who likes those puts apparently. The 2.50 put is offered at the insanely expensive price of 2.32. So if...
In other words OP, what makes you think that volume was driven by call buyers? How do you know it wasn't a mad rush to sell those calls at any...
When I was in T-bond options and carrying big positions against hundreds of futures, my variation margin could change drastically with a big move...
There's really no right or wrong way to do this - everyone has their own ideas. If you're feeling energetic and really want to do a bang-up job...
Traditionally, in a futures and options-on-futures account, you can have margin money held in T-bills. That's why pricing models used for options...
Easy to show with a simple example. IBM is about 120. Let's say you've decided to spend $10,000 on long-term insurance (puts) against IBM's...
LOL. Probably the most common words I heard spoken in the pit were "Hey, you're standing in my spot." Not much trading wisdom there but then...
If you think about it, it should become obvious that as IV goes up, so does theta. Think of it this way. Today the slightly-out-of-the-money...
Uh oh Mark, now you've done it. You've made Master at Work mad. There've been lots of discussions in the past in which MAW has insisted that...
That all makes perfect sense. With rates this low, makes it hard to ignore the nearby limit of zero. BTW, when I was in T-bond options in the...
Very interesting Martin. Are you saying that you would use a model assuming a normal distribution to trade options on a contract denominated in...
Look at it this way. If silver is at $5 an ounce, which would you rather own, the $1 puts or the $9 calls? Obviously the $9 calls. If silver...
I think you're confusing supply/demand of options (which is what determines IV) with supply/demand of the underlying, which is what Schap is...
I was talking about single month. I was just thinking about making a brief video to explain this, as a matter of fact.
Sorry Mark, didn't mean to come off as sarcastic. In my previous message I said that no demand = no IV. You seemed to take issue with that by...
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