He means buy back the spread which is turning profitable and sell another closer to the money. Say you put on an SPX IC with both short options...
You can negotiate their fees down. I did. I don't trade a large account with them, either. (I only trade options, but I assume the same is true...
If you buy an OTM spread that requires a move in the underlying to become profitable at expiry, then the spread will expire worthless just as the...
Well, for one thing my broker will simply wash the 2 legs at a discounted rate if they're both ITM at expiry. Obviously I have to be careful and...
Your predilection for stating absolutes is getting away from you (again). I have a method wherein I can predict with ~ 70% accuracy when certain...
OK, at least now we're talking about the "same" spread (at expiry). Thanks.
Do you have a feel for what kind of losses you take relative to the max gain when the underlying hits one of the short legs and you adjust? I...
I don't see the point of comparing an OTM put spread to an OTM call spread. They have different strikes and will obviously behave differently....
With a debit spread more time is your enemy and more volatility is your friend. With a credit spread more time is your friend and more volatility...
You said "a debt spread needs the stock to move a certain direction." That's not always true. If I am bullish on a stock and I buy a call debit...
Let's break this down. You're bearish on MSFT? You expect it to drop to something near or below the strike price of your short put at...
Ummm . . . no? Disregarding the wider bid/ask spread on the typical debit spread, it is identical to the credit spread with the same strike...
That's a good point, but it doesn't really speak to the profitability of the box trade, it just speaks to the prudence of putting one on.
No need to post an example. If one converts to a box at a price which locks in profits, then it is risk-free IF it is held thru expiry. In...
The most likely of which is an impeding ex-dividend date, isn't it?
What makes you think the pop in GOOGL wasn't the ~ 15% probability move?
Consistent with the previous point about higher implied volatility leading to higher option prices is the idea that the breakeven points of a long...
Yeah, who cares about theta decay and downside protection and any number of other reasons one might want to put on a spread? Listen to...
Yes, that's a good way of putting it. I want to hedge delta with vega when possible, so adverse moves aren't as painful. It seems to me an...
I just don't understand your statements about bear spreads and their Greeks.
Separate names with a comma.