Helpers for CoveredCall (CC) and CashSecuredPut (CSP) trading This is normally a program, but its output is informative and useful. Below are example outputs for "CC Opening", "CC Closing", "CSP Opening", "CSP Closing". This is a new idea & tool I just wrote; it's not field tested yet. If you spot an error, or have a suggestion for improving it, let me know. Thx. Legend: S.A means Stock.Ask, S.B means Stock.Bid (similar for C and P (Call and Put)), O means generic Option, K means Strike. Tip: One should begin reading the tables in the middle (center) where all 3 columns have an "I" ... The CSP tables (the last 2) are maybe hard to understand... This is useful when filling the CC or CSP order: ie. you have the quotes and need to calc your own NetDebit or NetCredit offer... The quotes used here are just made up, not real. Code: ------------------------------------------------------------------------------------------------------- 1) help_CC_CSP fCC=1 fOpening=1 S.B=10.0000 S.A=11.0000 K=5.00 O.B=1.50 O.A=2.00 n=2 Formula for CC Opening: "CostBase = -S.A + C.B --> NetDebit = S.A - C.B" CC Opening: Good if S.A rises, C.B falls [unintuitive!], or both. a) If S.A falls (= bad) then C.B should fall as well at least the same amount (the more the better). b) If C.B rises (= bad) then S.A should rise as well at least the same amount (the more the better). BaseSx = S.A = 11.0000 BasePr = C.B = 1.5000 Initial CostBase = -BaseSx + BasePr = -11.0000 + 1.5000 = -9.5000 --> NetDebit = BaseSx - BasePr = 11.0000 - 1.5000 = 9.5000 S.A=11.0200 C.B=1.5200 : CostBase=-9.5000 NetDebit=9.5000 I S.A=11.0200 C.B=1.5100 : CostBase=-9.5100 NetDebit=9.5100 S.A=11.0200 C.B=1.5000 I : CostBase=-9.5200 NetDebit=9.5200 S.A=11.0200 C.B=1.4900 : CostBase=-9.5300 NetDebit=9.5300 S.A=11.0200 C.B=1.4800 : CostBase=-9.5400 NetDebit=9.5400 S.A=11.0100 C.B=1.5200 : CostBase=-9.4900 NetDebit=9.4900 S.A=11.0100 C.B=1.5100 : CostBase=-9.5000 NetDebit=9.5000 I S.A=11.0100 C.B=1.5000 I : CostBase=-9.5100 NetDebit=9.5100 S.A=11.0100 C.B=1.4900 : CostBase=-9.5200 NetDebit=9.5200 S.A=11.0100 C.B=1.4800 : CostBase=-9.5300 NetDebit=9.5300 S.A=11.0000 I C.B=1.5200 : CostBase=-9.4800 NetDebit=9.4800 S.A=11.0000 I C.B=1.5100 : CostBase=-9.4900 NetDebit=9.4900 S.A=11.0000 I C.B=1.5000 I : CostBase=-9.5000 NetDebit=9.5000 I S.A=11.0000 I C.B=1.4900 : CostBase=-9.5100 NetDebit=9.5100 S.A=11.0000 I C.B=1.4800 : CostBase=-9.5200 NetDebit=9.5200 S.A=10.9900 C.B=1.5200 : CostBase=-9.4700 NetDebit=9.4700 S.A=10.9900 C.B=1.5100 : CostBase=-9.4800 NetDebit=9.4800 S.A=10.9900 C.B=1.5000 I : CostBase=-9.4900 NetDebit=9.4900 S.A=10.9900 C.B=1.4900 : CostBase=-9.5000 NetDebit=9.5000 I S.A=10.9900 C.B=1.4800 : CostBase=-9.5100 NetDebit=9.5100 S.A=10.9800 C.B=1.5200 : CostBase=-9.4600 NetDebit=9.4600 S.A=10.9800 C.B=1.5100 : CostBase=-9.4700 NetDebit=9.4700 S.A=10.9800 C.B=1.5000 I : CostBase=-9.4800 NetDebit=9.4800 S.A=10.9800 C.B=1.4900 : CostBase=-9.4900 NetDebit=9.4900 S.A=10.9800 C.B=1.4800 : CostBase=-9.5000 NetDebit=9.5000 I ------------------------------------------------------------------------------------------------------- 2) help_CC_CSP fCC=1 fOpening=0 S.B=10.0000 S.A=11.0000 K=5.00 O.B=1.50 O.A=2.00 n=2 Formula for CC Closing: "CostBase = -S.B + C.A --> NetCredit = S.B - C.A" CC Closing: Good if S.B falls, C.A rises, or both. a) If S.B rises (= bad) then C.A should rise as well at least the same amount (the more the better). b) If C.A falls (= bad) then S.B should fall as well at least the same amount (the more the better). BaseSx = S.B = 10.0000 BasePr = C.A = 2.0000 Initial CostBase = -BaseSx + BasePr = -10.0000 + 2.0000 = -8.0000 --> NetCredit = BaseSx - BasePr = 10.0000 - 2.0000 = 8.0000 S.B=10.0200 C.A=2.0200 : CostBase=-8.0000 NetCredit=8.0000 I S.B=10.0200 C.A=2.0100 : CostBase=-8.0100 NetCredit=8.0100 S.B=10.0200 C.A=2.0000 I : CostBase=-8.0200 NetCredit=8.0200 S.B=10.0200 C.A=1.9900 : CostBase=-8.0300 NetCredit=8.0300 S.B=10.0200 C.A=1.9800 : CostBase=-8.0400 NetCredit=8.0400 S.B=10.0100 C.A=2.0200 : CostBase=-7.9900 NetCredit=7.9900 S.B=10.0100 C.A=2.0100 : CostBase=-8.0000 NetCredit=8.0000 I S.B=10.0100 C.A=2.0000 I : CostBase=-8.0100 NetCredit=8.0100 S.B=10.0100 C.A=1.9900 : CostBase=-8.0200 NetCredit=8.0200 S.B=10.0100 C.A=1.9800 : CostBase=-8.0300 NetCredit=8.0300 S.B=10.0000 I C.A=2.0200 : CostBase=-7.9800 NetCredit=7.9800 S.B=10.0000 I C.A=2.0100 : CostBase=-7.9900 NetCredit=7.9900 S.B=10.0000 I C.A=2.0000 I : CostBase=-8.0000 NetCredit=8.0000 I S.B=10.0000 I C.A=1.9900 : CostBase=-8.0100 NetCredit=8.0100 S.B=10.0000 I C.A=1.9800 : CostBase=-8.0200 NetCredit=8.0200 S.B=9.9900 C.A=2.0200 : CostBase=-7.9700 NetCredit=7.9700 S.B=9.9900 C.A=2.0100 : CostBase=-7.9800 NetCredit=7.9800 S.B=9.9900 C.A=2.0000 I : CostBase=-7.9900 NetCredit=7.9900 S.B=9.9900 C.A=1.9900 : CostBase=-8.0000 NetCredit=8.0000 I S.B=9.9900 C.A=1.9800 : CostBase=-8.0100 NetCredit=8.0100 S.B=9.9800 C.A=2.0200 : CostBase=-7.9600 NetCredit=7.9600 S.B=9.9800 C.A=2.0100 : CostBase=-7.9700 NetCredit=7.9700 S.B=9.9800 C.A=2.0000 I : CostBase=-7.9800 NetCredit=7.9800 S.B=9.9800 C.A=1.9900 : CostBase=-7.9900 NetCredit=7.9900 S.B=9.9800 C.A=1.9800 : CostBase=-8.0000 NetCredit=8.0000 I ------------------------------------------------------------------------------------------------------- 3) help_CC_CSP fCC=0 fOpening=1 S.B=10.0000 S.A=11.0000 K=5.00 O.B=1.50 O.A=2.00 n=2 Formula for CSP Opening: "CostBase = -K + P.B --> NetDebit = K - P.B" CSP Opening: Good if P.B rises. S.* not used, K used. BaseSx = K = 5.0000 BasePr = P.B = 1.5000 Initial CostBase = -BaseSx + BasePr = -5.0000 + 1.5000 = -3.5000 --> NetDebit = BaseSx - BasePr = 5.0000 - 1.5000 = 3.5000 S.A=11.0200 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=11.0200 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=11.0200 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=11.0200 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=11.0200 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 S.A=11.0100 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=11.0100 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=11.0100 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=11.0100 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=11.0100 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 S.A=11.0000 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=11.0000 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=11.0000 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=11.0000 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=11.0000 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 S.A=10.9900 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=10.9900 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=10.9900 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=10.9900 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=10.9900 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 S.A=10.9800 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=10.9800 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=10.9800 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=10.9800 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=10.9800 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 ------------------------------------------------------------------------------------------------------- 4) help_CC_CSP fCC=0 fOpening=0 S.B=10.0000 S.A=11.0000 K=5.00 O.B=1.50 O.A=2.00 n=2 Formula for CSP Closing: "CostBase = -K + P.A --> NetCredit = K - P.A" CSP Closing: Good if P.A falls. S.* not used, K used. BaseSx = K = 5.0000 BasePr = P.A = 2.0000 Initial CostBase = -BaseSx + BasePr = -5.0000 + 2.0000 = -3.0000 --> NetCredit = BaseSx - BasePr = 5.0000 - 2.0000 = 3.0000 S.B=10.0200 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=10.0200 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=10.0200 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=10.0200 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=10.0200 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 S.B=10.0100 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=10.0100 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=10.0100 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=10.0100 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=10.0100 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 S.B=10.0000 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=10.0000 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=10.0000 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=10.0000 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=10.0000 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 S.B=9.9900 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=9.9900 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=9.9900 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=9.9900 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=9.9900 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 S.B=9.9800 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=9.9800 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=9.9800 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=9.9800 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=9.9800 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 -------------------------------------------------------------------------------------------------------
Table 1 and table 2 in the initial posting above are buggy (logic reversed). Here's the fixed version: Helpers for CoveredCall (CC) and CashSecuredPut (CSP) trading (fixed version 1) This is normally a program, but its output is informative and useful. Below are example outputs for "CC Opening", "CC Closing", "CSP Opening", "CSP Closing". This is a new idea & tool I just wrote; it's not field tested yet. If you spot an error, or have a suggestion for improving it, let me know. Thx. Legend: S.A means Stock.Ask, S.B means Stock.Bid (similar for C and P (Call and Put)), O means generic Option, K means Strike. Tip: One should begin reading the tables in the middle (center) where all 3 columns have an "I" ... The CSP tables (the last 2) are maybe hard to understand... This is useful when filling the CC or CSP order: ie. you have the quotes and need to calc your own NetDebit or NetCredit offer... The quotes used here are just made up, not real. Code: ------------------------------------------------------------------------------------------------------- (fixed version 1) 1) help_CC_CSP fCC=1 fOpening=1 S.B=10.0000 S.A=11.0000 K=5.00 O.B=1.50 O.A=2.00 n=2 Formula for CC Opening: "CostBase = -S.A + C.B --> NetDebit = S.A - C.B" CC Opening: Good if S.A falls, C.B rises, or both. a) If S.A rises (= bad) then C.B should rise as well at least the same amount (the more the better). b) If C.B falls (= bad) then S.A should fall as well at least the same amount (the more the better). BaseSx = S.A = 11.0000 BasePr = C.B = 1.5000 Initial CostBase = -BaseSx + BasePr = -11.0000 + 1.5000 = -9.5000 --> NetDebit = BaseSx - BasePr = 11.0000 - 1.5000 = 9.5000 S.A=11.0200 C.B=1.5200 : CostBase=-9.5000 NetDebit=9.5000 I S.A=11.0200 C.B=1.5100 : CostBase=-9.5100 NetDebit=9.5100 S.A=11.0200 C.B=1.5000 I : CostBase=-9.5200 NetDebit=9.5200 S.A=11.0200 C.B=1.4900 : CostBase=-9.5300 NetDebit=9.5300 S.A=11.0200 C.B=1.4800 : CostBase=-9.5400 NetDebit=9.5400 S.A=11.0100 C.B=1.5200 : CostBase=-9.4900 NetDebit=9.4900 S.A=11.0100 C.B=1.5100 : CostBase=-9.5000 NetDebit=9.5000 I S.A=11.0100 C.B=1.5000 I : CostBase=-9.5100 NetDebit=9.5100 S.A=11.0100 C.B=1.4900 : CostBase=-9.5200 NetDebit=9.5200 S.A=11.0100 C.B=1.4800 : CostBase=-9.5300 NetDebit=9.5300 S.A=11.0000 I C.B=1.5200 : CostBase=-9.4800 NetDebit=9.4800 S.A=11.0000 I C.B=1.5100 : CostBase=-9.4900 NetDebit=9.4900 S.A=11.0000 I C.B=1.5000 I : CostBase=-9.5000 NetDebit=9.5000 I S.A=11.0000 I C.B=1.4900 : CostBase=-9.5100 NetDebit=9.5100 S.A=11.0000 I C.B=1.4800 : CostBase=-9.5200 NetDebit=9.5200 S.A=10.9900 C.B=1.5200 : CostBase=-9.4700 NetDebit=9.4700 S.A=10.9900 C.B=1.5100 : CostBase=-9.4800 NetDebit=9.4800 S.A=10.9900 C.B=1.5000 I : CostBase=-9.4900 NetDebit=9.4900 S.A=10.9900 C.B=1.4900 : CostBase=-9.5000 NetDebit=9.5000 I S.A=10.9900 C.B=1.4800 : CostBase=-9.5100 NetDebit=9.5100 S.A=10.9800 C.B=1.5200 : CostBase=-9.4600 NetDebit=9.4600 S.A=10.9800 C.B=1.5100 : CostBase=-9.4700 NetDebit=9.4700 S.A=10.9800 C.B=1.5000 I : CostBase=-9.4800 NetDebit=9.4800 S.A=10.9800 C.B=1.4900 : CostBase=-9.4900 NetDebit=9.4900 S.A=10.9800 C.B=1.4800 : CostBase=-9.5000 NetDebit=9.5000 I ------------------------------------------------------------------------------------------------------- 2) help_CC_CSP fCC=1 fOpening=0 S.B=10.0000 S.A=11.0000 K=5.00 O.B=1.50 O.A=2.00 n=2 Formula for CC Closing: "CostBase = -S.B + C.A --> NetCredit = S.B - C.A" CC Closing: Good if S.B rises, C.A falls, or both. a) If S.B falls (= bad) then C.A should fall as well at least the same amount (the more the better). b) If C.A rises (= bad) then S.B should rise as well at least the same amount (the more the better). BaseSx = S.B = 10.0000 BasePr = C.A = 2.0000 Initial CostBase = -BaseSx + BasePr = -10.0000 + 2.0000 = -8.0000 --> NetCredit = BaseSx - BasePr = 10.0000 - 2.0000 = 8.0000 S.B=10.0200 C.A=2.0200 : CostBase=-8.0000 NetCredit=8.0000 I S.B=10.0200 C.A=2.0100 : CostBase=-8.0100 NetCredit=8.0100 S.B=10.0200 C.A=2.0000 I : CostBase=-8.0200 NetCredit=8.0200 S.B=10.0200 C.A=1.9900 : CostBase=-8.0300 NetCredit=8.0300 S.B=10.0200 C.A=1.9800 : CostBase=-8.0400 NetCredit=8.0400 S.B=10.0100 C.A=2.0200 : CostBase=-7.9900 NetCredit=7.9900 S.B=10.0100 C.A=2.0100 : CostBase=-8.0000 NetCredit=8.0000 I S.B=10.0100 C.A=2.0000 I : CostBase=-8.0100 NetCredit=8.0100 S.B=10.0100 C.A=1.9900 : CostBase=-8.0200 NetCredit=8.0200 S.B=10.0100 C.A=1.9800 : CostBase=-8.0300 NetCredit=8.0300 S.B=10.0000 I C.A=2.0200 : CostBase=-7.9800 NetCredit=7.9800 S.B=10.0000 I C.A=2.0100 : CostBase=-7.9900 NetCredit=7.9900 S.B=10.0000 I C.A=2.0000 I : CostBase=-8.0000 NetCredit=8.0000 I S.B=10.0000 I C.A=1.9900 : CostBase=-8.0100 NetCredit=8.0100 S.B=10.0000 I C.A=1.9800 : CostBase=-8.0200 NetCredit=8.0200 S.B=9.9900 C.A=2.0200 : CostBase=-7.9700 NetCredit=7.9700 S.B=9.9900 C.A=2.0100 : CostBase=-7.9800 NetCredit=7.9800 S.B=9.9900 C.A=2.0000 I : CostBase=-7.9900 NetCredit=7.9900 S.B=9.9900 C.A=1.9900 : CostBase=-8.0000 NetCredit=8.0000 I S.B=9.9900 C.A=1.9800 : CostBase=-8.0100 NetCredit=8.0100 S.B=9.9800 C.A=2.0200 : CostBase=-7.9600 NetCredit=7.9600 S.B=9.9800 C.A=2.0100 : CostBase=-7.9700 NetCredit=7.9700 S.B=9.9800 C.A=2.0000 I : CostBase=-7.9800 NetCredit=7.9800 S.B=9.9800 C.A=1.9900 : CostBase=-7.9900 NetCredit=7.9900 S.B=9.9800 C.A=1.9800 : CostBase=-8.0000 NetCredit=8.0000 I ------------------------------------------------------------------------------------------------------- 3) help_CC_CSP fCC=0 fOpening=1 S.B=10.0000 S.A=11.0000 K=5.00 O.B=1.50 O.A=2.00 n=2 Formula for CSP Opening: "CostBase = -K + P.B --> NetDebit = K - P.B" CSP Opening: Good if P.B rises. S.* not used, K used. BaseSx = K = 5.0000 BasePr = P.B = 1.5000 Initial CostBase = -BaseSx + BasePr = -5.0000 + 1.5000 = -3.5000 --> NetDebit = BaseSx - BasePr = 5.0000 - 1.5000 = 3.5000 S.A=11.0200 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=11.0200 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=11.0200 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=11.0200 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=11.0200 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 S.A=11.0100 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=11.0100 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=11.0100 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=11.0100 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=11.0100 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 S.A=11.0000 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=11.0000 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=11.0000 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=11.0000 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=11.0000 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 S.A=10.9900 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=10.9900 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=10.9900 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=10.9900 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=10.9900 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 S.A=10.9800 P.B=1.5200 : CostBase=-3.4800 NetDebit=3.4800 S.A=10.9800 P.B=1.5100 : CostBase=-3.4900 NetDebit=3.4900 S.A=10.9800 P.B=1.5000 I : CostBase=-3.5000 NetDebit=3.5000 I S.A=10.9800 P.B=1.4900 : CostBase=-3.5100 NetDebit=3.5100 S.A=10.9800 P.B=1.4800 : CostBase=-3.5200 NetDebit=3.5200 ------------------------------------------------------------------------------------------------------- 4) help_CC_CSP fCC=0 fOpening=0 S.B=10.0000 S.A=11.0000 K=5.00 O.B=1.50 O.A=2.00 n=2 Formula for CSP Closing: "CostBase = -K + P.A --> NetCredit = K - P.A" CSP Closing: Good if P.A falls. S.* not used, K used. BaseSx = K = 5.0000 BasePr = P.A = 2.0000 Initial CostBase = -BaseSx + BasePr = -5.0000 + 2.0000 = -3.0000 --> NetCredit = BaseSx - BasePr = 5.0000 - 2.0000 = 3.0000 S.B=10.0200 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=10.0200 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=10.0200 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=10.0200 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=10.0200 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 S.B=10.0100 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=10.0100 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=10.0100 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=10.0100 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=10.0100 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 S.B=10.0000 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=10.0000 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=10.0000 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=10.0000 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=10.0000 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 S.B=9.9900 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=9.9900 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=9.9900 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=9.9900 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=9.9900 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 S.B=9.9800 P.A=2.0200 : CostBase=-2.9800 NetCredit=2.9800 S.B=9.9800 P.A=2.0100 : CostBase=-2.9900 NetCredit=2.9900 S.B=9.9800 P.A=2.0000 I : CostBase=-3.0000 NetCredit=3.0000 I S.B=9.9800 P.A=1.9900 : CostBase=-3.0100 NetCredit=3.0100 S.B=9.9800 P.A=1.9800 : CostBase=-3.0200 NetCredit=3.0200 -------------------------------------------------------------------------------------------------------
The tool in real trade action: trying to open a CC for ticker QBTS: current Stock.Ask=0.93. If it falls below 0.93 then the CC should get filled (if Call.Bid stays the same, or rises). B/c then NetDebit becomes < 0.33 (see table below), my NetDebit offer is 0.33, meaning a fill has to occur. This is the expectation, the reality could be different if broker does it "differently"... We'll see... Code: help_CC_CSP fCC=1 fOpening=1 S.B=0.9235 S.A=0.9300 K=1.00 C.B=0.60 C.A=0.65 n=2 Formula for CC Opening: "CostBase = -S.A + C.B --> NetDebit = S.A - C.B" CC Opening: Good if S.A falls, C.B rises, or both. a) If S.A rises (= bad) then C.B should rise as well at least the same amount (the more the better). b) If C.B falls (= bad) then S.A should fall as well at least the same amount (the more the better). BaseSx = S.A = 0.9300 BasePr = C.B = 0.6000 Initial CostBase = -BaseSx + BasePr = -0.9300 + 0.6000 = -0.3300 --> NetDebit = BaseSx - BasePr = 0.9300 - 0.6000 = 0.3300 S.A=0.9500 C.B=0.6200 : CostBase=-0.3300 NetDebit=0.3300 I S.A=0.9500 C.B=0.6100 : CostBase=-0.3400 NetDebit=0.3400 S.A=0.9500 C.B=0.6000 I : CostBase=-0.3500 NetDebit=0.3500 S.A=0.9500 C.B=0.5900 : CostBase=-0.3600 NetDebit=0.3600 S.A=0.9500 C.B=0.5800 : CostBase=-0.3700 NetDebit=0.3700 S.A=0.9400 C.B=0.6200 : CostBase=-0.3200 NetDebit=0.3200 S.A=0.9400 C.B=0.6100 : CostBase=-0.3300 NetDebit=0.3300 I S.A=0.9400 C.B=0.6000 I : CostBase=-0.3400 NetDebit=0.3400 S.A=0.9400 C.B=0.5900 : CostBase=-0.3500 NetDebit=0.3500 S.A=0.9400 C.B=0.5800 : CostBase=-0.3600 NetDebit=0.3600 S.A=0.9300 I C.B=0.6200 : CostBase=-0.3100 NetDebit=0.3100 S.A=0.9300 I C.B=0.6100 : CostBase=-0.3200 NetDebit=0.3200 S.A=0.9300 I C.B=0.6000 I : CostBase=-0.3300 NetDebit=0.3300 I S.A=0.9300 I C.B=0.5900 : CostBase=-0.3400 NetDebit=0.3400 S.A=0.9300 I C.B=0.5800 : CostBase=-0.3500 NetDebit=0.3500 S.A=0.9200 C.B=0.6200 : CostBase=-0.3000 NetDebit=0.3000 S.A=0.9200 C.B=0.6100 : CostBase=-0.3100 NetDebit=0.3100 S.A=0.9200 C.B=0.6000 I : CostBase=-0.3200 NetDebit=0.3200 S.A=0.9200 C.B=0.5900 : CostBase=-0.3300 NetDebit=0.3300 I S.A=0.9200 C.B=0.5800 : CostBase=-0.3400 NetDebit=0.3400 S.A=0.9100 C.B=0.6200 : CostBase=-0.2900 NetDebit=0.2900 S.A=0.9100 C.B=0.6100 : CostBase=-0.3000 NetDebit=0.3000 S.A=0.9100 C.B=0.6000 I : CostBase=-0.3100 NetDebit=0.3100 S.A=0.9100 C.B=0.5900 : CostBase=-0.3200 NetDebit=0.3200 S.A=0.9100 C.B=0.5800 : CostBase=-0.3300 NetDebit=0.3300 I Right now the price matches, but it still has not got a fill ! Suspicious, IMO...: Code: help_CC_CSP fCC=1 fOpening=1 S.B=0.9225 S.A=0.9281 K=1.00 C.B=0.60 C.A=0.65 n=2 Formula for CC Opening: "CostBase = -S.A + C.B --> NetDebit = S.A - C.B" CC Opening: Good if S.A falls, C.B rises, or both. a) If S.A rises (= bad) then C.B should rise as well at least the same amount (the more the better). b) If C.B falls (= bad) then S.A should fall as well at least the same amount (the more the better). BaseSx = S.A = 0.9281 BasePr = C.B = 0.6000 Initial CostBase = -BaseSx + BasePr = -0.9281 + 0.6000 = -0.3281 --> NetDebit = BaseSx - BasePr = 0.9281 - 0.6000 = 0.3281 S.A=0.9481 C.B=0.6200 : CostBase=-0.3281 NetDebit=0.3281 I S.A=0.9481 C.B=0.6100 : CostBase=-0.3381 NetDebit=0.3381 S.A=0.9481 C.B=0.6000 I : CostBase=-0.3481 NetDebit=0.3481 S.A=0.9481 C.B=0.5900 : CostBase=-0.3581 NetDebit=0.3581 S.A=0.9481 C.B=0.5800 : CostBase=-0.3681 NetDebit=0.3681 S.A=0.9381 C.B=0.6200 : CostBase=-0.3181 NetDebit=0.3181 S.A=0.9381 C.B=0.6100 : CostBase=-0.3281 NetDebit=0.3281 I S.A=0.9381 C.B=0.6000 I : CostBase=-0.3381 NetDebit=0.3381 S.A=0.9381 C.B=0.5900 : CostBase=-0.3481 NetDebit=0.3481 S.A=0.9381 C.B=0.5800 : CostBase=-0.3581 NetDebit=0.3581 S.A=0.9281 I C.B=0.6200 : CostBase=-0.3081 NetDebit=0.3081 S.A=0.9281 I C.B=0.6100 : CostBase=-0.3181 NetDebit=0.3181 S.A=0.9281 I C.B=0.6000 I : CostBase=-0.3281 NetDebit=0.3281 I S.A=0.9281 I C.B=0.5900 : CostBase=-0.3381 NetDebit=0.3381 S.A=0.9281 I C.B=0.5800 : CostBase=-0.3481 NetDebit=0.3481 S.A=0.9181 C.B=0.6200 : CostBase=-0.2981 NetDebit=0.2981 S.A=0.9181 C.B=0.6100 : CostBase=-0.3081 NetDebit=0.3081 S.A=0.9181 C.B=0.6000 I : CostBase=-0.3181 NetDebit=0.3181 S.A=0.9181 C.B=0.5900 : CostBase=-0.3281 NetDebit=0.3281 I S.A=0.9181 C.B=0.5800 : CostBase=-0.3381 NetDebit=0.3381 S.A=0.9081 C.B=0.6200 : CostBase=-0.2881 NetDebit=0.2881 S.A=0.9081 C.B=0.6100 : CostBase=-0.2981 NetDebit=0.2981 S.A=0.9081 C.B=0.6000 I : CostBase=-0.3081 NetDebit=0.3081 S.A=0.9081 C.B=0.5900 : CostBase=-0.3181 NetDebit=0.3181 S.A=0.9081 C.B=0.5800 : CostBase=-0.3281 NetDebit=0.3281 I
Have you considered the issue with market makers?? No one deals with a true "market" anymore... Things like MMs and dark pools come into play big time...
Can you please elaborate the implications. Ie. what exactly does it mean, and how is it relevant for the said issue? FYI: I'm submitting my order via a very normal retail brokerage firm (TDA), not directly dealing with or routing to specific MMs or ECN market places etc.; just using the default "SMART" route (or whatever it's called by each brokerage firm). And: this is a true CoveredCall order. Don't know whether this counts as a Complex Order and therefore goes to the COB (the 'Complex Order Book') or not.
Sorry, no I won't. Trying to explain the issues can not be summed up in a few paragraphs. Truly it can not be summed up in a book! You would need to read a couple of books to understand the issues. But to write any program without taking into consideration MMs is very very buggy...Since they control the bid/ask. There is a reason your stock/option trades are basically free... Spend the time and learn why. A good lesson...Explain why Citadel Securities made so much money. Company type Private Revenue US$7.5 billion (2022) Number of employees 1,600 (2023)
My above said order is still open. Yesterday I had placed also another such CC order (with DTE=710 ! ) for a different ticker. That second order luckily just has got a fill.