Typically the strike price remains the same, and the options are adjusted to require delivery of the cash. You will have the option to buy $2600...
A cash-secured put is a naked put. Cash or margin don't "cover" puts, because they don't limit the loss. The term "secured" only refers to your...
You could probably easily achieve 15% per annum writing OTM vertical spreads, if you pick stocks whose behaviour you are reasonably confident you...
That's a highly misleading statistic, and besides it's not even true....
To make money buying options, you need to be right about three things: 1. Which direction a stock will move 2. How far it will move 3. When...
If you have options for delivery of 100 GSF, they will become options for delivery of $2600 plus 50 shares of NewCo. Nothing else will change.
I play the stock first and choose my options based on where I think the stock will end up, so as long as the time premium gives me enough wiggle...
Seems to me that a long put of any duration will cover 100 short shares, and the net amount of maintenance for the position will depend on the...
Because they think they're smarter than the market.
You can also write puts synthetically by writing covered calls, which for most brokers is the first baby level of option permissions. But yeah,...
Managing a synthetic isn't really more difficult than managing the true position. You make the same adjustments, and the positions stay...
Yikes. Paying 4% to limit your losses to 5%? That's crazynuts. What is the position you are hedging? A straight long portfolio? Something like...
Options are derivative securities. You can't trade options well without understanding how the underlying security behaves. If you're going to...
A call gives you the exact same downside protection. In both cases, the maximum you can lose is the price drop down do your strike, plus the time...
In general, your strike price selection depends on your outlook for the stock. If you're writing options, the ideal scenario is for the option...
The first thing you will learn is that options are derivative securities. That means they each get their value from the value of the underlying...
That's kind of my point. Delta is all that matters for stocks, because it's how many shares you own. Delta isn't the only aspect of an option...
That makes sense, though. Exchanging a stock for a short put is the same as writing a covered call. If you'd sat on your shares and written the...
I wouldn't think so, since September options and October options are different securities. You're not booking a loss on the same investment you...
At least you charge a fair price for it.
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