What a load of nonsense. Now I see where you got your name. It should be obvious to you that the raw price per contract is no indication of...
An option is "at the money" when the stock price equals the strike price. When the stock price is above the strike price by a certain amount,...
You theoretically could use any of the cash in your account to buy stock. But in reality, the credit you get from writing a put is not even enough...
Selling puts would increase your cash balance, but it would decrease the amount of capital you have to invest. Remember, you must keep marginable...
On the other hand, if you're not-bearish, naked puts are a better investment. Either way, threat number one is bears.
Long calls and naked puts are the yin and yang of stock ownership. Naked puts profit over a wider range of stock prices, which somewhat makes...
That's how I do it. With an index it should be a relatively simple matter since the strikes are so dense. It's harder with stocks where the...
That's why, if you want to be sure to sell an DITM option on the third Friday, you should offer it very slightly below intrinsic value. Any market...
I don't think that's exactly what you meant. Options don't give you any "buying power", no matter how much they're worth. What might happen,...
Your margin requirements should be somewhat relaxed anyway, shorting against calls. Still, it's far simpler to just sell the options.
Offer the options at 10 cents below intrinsic. Someone will buy them for sure. You won't have to own a single share.
Those would be covered options, then. You can never have more money at risk in your IRA than you have cash in your account. You can't write...
I guess it's no secret by now that the market can go horribly, horribly wrong in the final hour of trading. Gonna take some people an awful lot...
You are absolutely correct in your assessment. There's a reason people close out shorts for a nickel on the third Friday - that's not the time to...
The holder of a call doesn't take into account his purchase price when he exercises to capture the dividend. Whether he paid $1.20, $4.20 or 40...
Considering that they were ITM debit spreads, the long leg was 5+ points ITM. I can imagine that conversation with the broker on Monday morning,...
I've exercised options a bunch of times. Back when I used to trade debit spreads, I'd often let both legs get assigned if the spread was ITM....
The call doesn't entitle you to $2600. Owning 100 shares of GSF entitles you to $2600. Owning the call entitles you to buy $2600 (plus some other...
There's no hard and fast rule. As you go farther OTM, the graph progressively changes from the accelerating-decay one to the decelerating-decay...
It is true, if you go far enough OTM. Near the money, there's always a possibility that the stock will move far enough to affect the option....
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