OBC 85: Your Qs About Options Mistakes, Earnings Volatility and More



  • QUESTION FROM Daniel P Kuczero: What are your thoughts on financially engineering an options strategy to get consistent 8% returns? This is listed on Swan’s marketing – I wonder if it is pointed toward them???
  • QUESTION FROM THEGRATE: Does anyone offer a pre-earnings straddle basket that you can buy to trade a large number of events at once?
  • QUESTION FROM Stockpicker320: If the stock market was closed during the expiration date and I owned “In the money” Call options I would assume that there would be a mechanism in place and my broker, TD Ameritrade, would still allow me to execute them before the Expiration Date on their website or by calling them. At the Expiration Date “In the Money” options get exercised automatically by TD Ameritrade as long as they are in the money by 0.01. It could be very dangerous if the Call options were only in the money by a few cents because the stock price could gap down when the stock market finally opened which could result in a big loss if I had a lot of options which controlled many shares of a stock. If my Call options were only in the money by a few cents I would call TD Ameritrade before the expiration date and ask them “Do Not Exercise” the options. Unfortunately this can’t be done on their website and must be done by a phone call.
  • RELATED QUESTION FROM Mike Wienick: If the markets are shut down due to The extraordinary circumstances and I have expiring in the money puts that I  bought – what happens?  Are the expiring options automatically exercised or do they just expire worthless because the market was shut down?
  • RELATED QUESTION FROM NNJ66: What happens if the stock is halted or exchanges are shut down when I own puts?
  • COMMENT FROM Michael Pledgure: Lets see if the S&P 500 will break to new highs and continue this time?
  • COMMENT FROM Malibu Invest: Two words; long tankers. RE: MASSIVE SELLOFF IN CRUDE OIL
  • QUESTION FROM JAY JONES: I generally trade for credit; either vertical spreads or iron condors. My question for you today is: what is the benefit to trading a pure call or put condor, vs an iron condor? The risk/reward profiles at expiration are identical, but it seems like theta decay doesn’t help the call condor or the put condor as much as it helps the iron condor. Can you give an example or discuss when the call condor or the put condor makes more sense than the iron condor? Thanks so much, and keep up the great work!

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