Let's start off by putting the decimal points in the right place so we're all clear about where we are. I assume your call verticals have a...
I guess you could use the TOS thinkback feature to click back and look at the IV of the May SPY 75 straddle, day by day, if that's what you're...
Every public-domain pricing model I'm aware of uses a lognormal probability distribution. If anyone is actually using a different probability...
Each and every strike trades at a different IV. Which IV do you want? If you want a weighted average, the VIX does a great job. It's calculated...
If you sell an option short, it's the same as selling an insurance policy. If you get assigned early, then essentially the person you've sold the...
Here's how you calculate the fair value of any bet. You have to know each possible outcome, the probability of each outcome, and the payout of...
Thanks - good to know.
The regular VIX futures are $1,000 a point, and the options are 1/10 that - $100 a point. So if the new mini vix is also $100 a point, then the...
How many minis make a big?
...thinking perhaps he was hedging his bet? Boy, this gets better by the minute.
I'm just in awe at the poetry of this. The world's most disciplined investor - the ultimate hero/guru of the entire 1982-2007 bull market run -...
I would buy that except for the undeniable fact that he DID make the trade. He DID sell those puts. So he must have felt he had a powerful...
I'm taken aback by Buffett's narrow understanding of options. How ironic that the instruments Buffett called "Financial weapons of mass...
What intrinsic value? In your scenario, your option went from being OTM (no intrinsic value) to ATM (still no intrinsic value). There won't be...
You never need to settle for less than the intrinsic value of an option on a futures contract. The clean easy way for you to lock in the...
Like you, the only way I can make sense of an option chain is by looking at the IV pattern strike to strike - the skew. Absolute prices mean...
I actually think it's right the way I said it - although I'm not a statistician and I could be wrong. For one thing, if we use "anytime between...
I have to disagree. Let's set aside for the moment the effect of lognormal distribution for simplicity's sake. If SPY is 80, then 40%...
The crude oil contract is for 1000 barrels. So that $3 option will cost you $3000.
Yeah, I think they tried geek futures, but there were no bids.:)
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