Yeah, that part I already thought about. One would have to dabble in "well-behaved" stocks. Biotech, for example, would be a bad choice, I think....
That's fine. But you didn't explain why. Could you explain the mechanics of why that should be the case? Doesn't it depend on how much time decay...
But its extrinsic value is zero. And any intrinsic value would be covered by the stock bought right at the strike price or slightly below (right...
But I am trying to go to expiration, rain or shine, so whatever happens to the option in the meantime, it will be zero at the end. What I wanted...
You are probably an experienced options trader, and I am sure it works for you, and hopefully for me some day soon. But my concern was more...
You are right. I probably should have put it in the options forum. Too late for that. But, from the two quick replies (thanks!) I take it the...
Well, if I am buying purely to hedge, I would have to look at the delta, which would have to be around 0.50, meaning 50 shares for each option....
Consider the following example. If I sell out-of-money Google calls (say May 590 for $4.40), and GOOG advances near 590 (it is currently at...
Is it usually the case that the premiums (presumably corresponding to the midpoint of bid and ask?) are dwarfed by the bid-ask spread? Come to...
That's a reasonable but incorrect guess. However, I currently have no intention of playing FX options. My goal was to understand the thinking and...
So, doesn't this agree with the possibility #2, which said "2. Neither is good. All you do on average is pay the broker and the market maker for...
You can still sell premium with spreads, can't you? If it's a credit spread, you just sold some net premium, right? So, if selling premium is...
If options are priced fairly, then it shouldn't make any difference in the absence of an extra, not-priced-in information, right? Fast premium...
Hmm. So in a perfectly fair and efficient market, the only money an insurer can make is the labor he puts into servicing your insurance needs. And...
Hi MathAndLogic, Could you briefly explain what advantage a binary option presents over vertical spreads? Is it simplicity? Can they be...
Oh no, that wasn't what I implied at all. What I wanted to know is a way to interpret the comments or experiences of other traders. I expressed no...
If I understand you correctly, you agree that Insurinator's complaint isn't about FX vertical spreads being terrible deals per se. It's just that...
Let me elaborate why I posted on this thread after all. When Insurinator wrote "My experience with forex options is that they offer you a poor...
Thanks for taking the time. I appreciate it. By "taking the other side" , I mean doing the opposite of the credit spread. For example, instead of...
Thanks for the explanation. I wasn't concerned about the definition of bear call spread though. I was just wondering if it is necessarily true...
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