So answer me this: in an (idealized) environment where the interest rate is zero and the underlying pays no dividend would American and European...
Care to elaborate? Put-call parity would seem to indicate that they are the same (carrying costs and dividends aside)
Analyze/Risk Profile on ToS is a very very helpful tool however a well known "flaw" is that when calculating the risk profile graphs it uses a...
This is incorrect right here. Flies and Iron Flies are synthetic equivalents; the only difference is that flies are entered into for a debit and...
You mean the dividend risk of being SHORT a DITM Call right?
For Options Trading most people will point you to one of these three books (among many others but these ones are a good place to start): Option...
Like spindr0 mentioned before, options are a way to set up stretegic positions. In this case you bet on something happening and that something has...
The "Daily P/L" is usually* calculated from bid/ask mid-price which might be skewing things. In any case, the real numbers are in the bid/ask...
Both your long and short positions that are ITM are auto-exercised, there is no need for you to initiate anything and in fact you may make things...
Trading options IS trading Volatility
20% of what? of the credit you received? Or 20% of the total risk (20 points x 10 contracts x 100 shares/contract = $20,000, so 20% of that would...
This is very interesting, but let me make sure I am getting it right. Is the problem with such a position that if VIX goes up because of a certain...
First things first, you don't have a bear put spread, you are short a put spread which is a bullish position. The reasons why you might have seen...
12 instances is hardly statistically relevant and especially statistically relevant enough to build a trading strategy around it.
He/she would still have unlimited risk (well, down to zero on the put side) so, while definitely an improvement, I think that for an earnings play...
As with everything in options it depends on whether you want more risk or reward in your strategy. Right now you could get a fatter juicier...
Who knows ! People said the same after the failed Obamacare repeal and it happened 3-4 times already (lost count) and here we are at all time highs.
It is a bit unclear what your current situation is and what you are trying to achieve ("Rather than writing naked options for premium...") so I...
I have seen it explained elsewhere for a move in the underlying (for example, an up move) as: 1.- A shift to the right of the whole IV curve so...
Are you implying that for "small" or "measured" or "normal" or "non-large", moves up or down in the underlying the actual skew doesn't change and...
Separate names with a comma.