4Q, I think you meant to direct your comments to MTE. In any case, I don't know of any case where you pay interest to short stock even if...
MTE, One minor disagreement, most brokers pay little or no interest on the proceeds from short stock. They pay on the proceeds from short...
Perhaps my term "factor in" implies more complication than I intended. Anyway I know that my cash earns almost 5%, so any potential profit on...
"Cost of carry" is the lost interest your cash might otherwise be earning. For example, when your position includes stock you are losing interest...
One thought: Your option modeling program may not factor in the cost of carry thereby making the risk graphs of synthetic equivalents look...
True, but a Call is more expensive than a Put because it contains the cost of carry. So when you have a short call it offsets the cost of carrying...
Although you have no capital outlay the cost of your long call has a "cost to carry" component so you are in effect paying interest. Because you...
In my mind the reverse collar is more expensive because most brokers do not pay interest on the short proceeds from the stock. However, you are...
Well in my book 5.5% is better than 5.1%. Also, I think that IB interest on cash is only 4.8%. So if you need a temporary place to park some money...
The EFP implied rates don't seem right to me. I think many times IB has dividends included in their calculations that don't exist in the futures...
Pardon me for jumping in, but it's not the seventy bucks. Often it's the time you have to invest to install, configure and figure out how to work...
Don't feel bad when I first read your post I couldn't see the mistake either. However, whenever I see a trade that looks that bad I always say...
It's not a wash. Let's assume you sold the original $130 puts for 50 cents. If you let them expire the profit is 50 cents (you keep the credit)....
No, if I understand you correctly your thinking is wrong. If the stock closes above the new, higher put price your profit would be $1. Before...
I am not sure that you would suffer "no trading ability for over a year". I think most brokers would consider stock a marginable security and, for...
I don't know of any brokers who pay interest on short stock. Although I think IB does pay some interest on the amount of the short balance over a...
I beg to differ a little bit. Many brokers do not pay decent interest on cash. Therefore many times a covered call is preferable to a NP. For...
The term "margin" seems to have many meanings so I'll just avoid using it for now. For IRA accounts basically you must have enough cash to...
Yes, OptionsXpress, and Thinkorswim to name two. There are probably others. Don
The reason it's important is because many people think that buying stocks is investing. Or worse yet, they think playing with options is...
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