I fully understand the P/L graphs. I disagree with your use of the phrase "unlimited downside" -- it's limited to 100% minus premiums generated...
Please explain the difference in account damage caused by a black swan event when one is (a) long stock (b) long stock with covered calls or (c)...
I don't think monthly 2% OTM calls are going to get exercised "a lot". They may not bank every time, but if one is willing to manage their...
Because it . . . does? I brought the PUT index into the discussion to show that as an investing strategy it can be shown to be superior to...
The black swan pays every investor a visit when she decides to show up. If you're fully invested long in the market and the market drops 40%,...
He wouldn't stay in the PUT index, he is selling puts to get assigned on stocks he wants to own, right? At that point he converts to covered...
Risk is relative.
I can completely understand not wanting to manage 70 puts at a time, and I acknowledge that tax issues must be taken into account. That said, I...
There will be others with far more experience than I who might quantify your opportunity costs, but I would suggest you read this study which...
I'd be curious to see what level of quick correction the more experienced traders around here build into their strategies. 20%? 30%? 50%? I...
Thanks. I thought the theta/gamma relationship wasn't necessarily true for a position? It's hard to imagine I'm adding the numbers incorrectly.
Well, I am trying to understand the alternatives to going long on the stock. Buying the stock outright gives me no exposure to any of the Greeks....
Maybe I should phrase it in the original context: With the right split strike synthetic long, it seems I can minimize volatility exposure and...
OK, I'm not following. What do you mean by "soft money calls"?
Oh . . . is that saying that buying delta in calls is going to kill me when the stock rallies? What if I buy a gamma neutral position?...
Heh. Like I said, not the smartest guy in the room. I've probably patented and brought to market 1000X more than most guys around here, so I can...
Oh, and on the topic of the example: I'm not trading NEM. I'm recently long there. It just had a less scary price than (say) SPY for the example.
Much obliged. I can completely buy into the notion that my definition of "cheap" is blind. I'm a weird cat -- I get the math, it's the...
Thanks for the quick reply. Looking at your suggestion, I would go: -- 11 NEM NEM Oct13 20 calls ($13,640) for a Delta of 1037. Gamma (12)...
OK, I'm rarely the smartest guy in the room, and that would definitely be the case if I were having lunch at the Quant Grille, but I'm not an...
Separate names with a comma.