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29 views

How to decide on the proper strike and expiry month while opening a long box spread

In theory, I should be able to open up a long box by selecting two strikes where the debit required is less than the difference between the strikes, then hold the box to expiration and get back an ...
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0answers
26 views

How to improve risk/reward profile of a calendar spread position

In a calendar spread (short front month ATM option, long back month ATM option), you want the stock to be right at the short strike at front month expiration. Too much movement from the short strike ...
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0answers
49 views

How to consider the effect of margin call risk in a gamma scalping strategy

I am trying to tippy toe into volatility trading and volatility strategies. So I was reading Sheldon Natenberg where he starts off with a portfolio of long ATM call and short 50 shares of stock to ...
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1answer
69 views

Are there option strategies that exploit mergers and acquisitions events

Are there any option strategies that can profit from mergers,acquisitions and buyouts? I don't mean insider trading, I mean after the news is out but the deal has not taken place yet, are there any ...
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2answers
122 views

What strike to choose if I want to sell weekly calls against a long LEAP put

I am looking at this strategy of selling weekly calls against long LEAP put options The strategy seems good to me. Quite an improvement over the regular collar strategy. What I do not get is why ...
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3answers
109 views

Dividend arbitrage using in the money puts

I was looking at dividend arbitrage It seems all I need to do is find stocks with a nice dividend(e.g KO). Then find an in the money put where the time premium is less than the dividend to be paid. ...
2
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1answer
65 views

a “fully” American option strategy?

Is there such a thing as an American butterfly spread? For a European butterfly spread simply buying 1 put with strike price X+a, 1 put with strike price X-a and shorting 2 calls with strike price X, ...
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0answers
41 views

Do I need to close out an in-the-money short straddle?

If I am short both a call and a put with the same strike on the same security, what happens if I let this position expire in-the-money? How much, if any, cash would I need to have liquid at ...
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1answer
142 views

Risk involved in buying LEAP put and selling short term puts against it?

Let's say company A is currently trading at 100. I bought to open 10 puts for company A at 100 strike price in Jan 2015. What risk am I exposed to by selling shorter term weekly puts (strike < ...
5
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1answer
851 views

Options: Letting it expire or sell when profiting?

Do you let your options expire or would you sell it before you let it expire if you're profiting (meaning you're in the green - market is going towards the correct direction you anticipated). If you ...
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3answers
97 views

Are there any investment strategies which take advantage of an in-the-money option price that incorporates no “time value”?

I'm not sure if "time value" is the correct term, but if an option (still at least several months from expiry) is trading at the difference between its underlying stock's price and its strike price, ...
1
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1answer
73 views

Physical Delivery vs Assignment?

In options: What is the difference between the two? Assignment: http://www.investopedia.com/terms/a/assignment.asp#axzz1tG3VpKt8 Physical Delivery: ...
4
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3answers
391 views

Options strategy - When stocks go opposite of your purchase?

I'm a bit new to options and would like to ask for someone's strategy opinion. Lets say that you buy a call at an expiration date 2 months or so from now, and in a few days you see the stock go flat ...
3
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3answers
203 views

What option-related strategies are better suited to increasing return potential?

At this time I buy and hold stocks. In the few coming months I am considering a change in my investment strategy. If I reduce my diversification that will increase my risk. My financial coach ...
2
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2answers
958 views

Strategies to recover from a bad short-term call options purchase where the underlying dropped instead?

If I bought some short-term call options on an expectation that the underlying stock would go up, but instead the underlying stock declined some, shortly after my options purchase, what choices are ...