In this episode, Mark, Dan Passarelli and Jill Malandrino take on listener questions.
Options Drills: Today’s topic was inspired by this listener question:
Question from MarkLitwin: How do you lose money in options in the most effective way?
- Don’t by ATM straddles
- Don’t load up on far OTM options because they’re cheap
- Don’t trade earnings
- Be careful with trading weeklies
- Watch out when selling options going into weekends or holidays
Mail Call: Listeners take over
- Question from ejh4isu: IF I buy/sell a vertical on SPX (or any equity stock for that matter) and hold until expiration, and SPX settles between the strikes, what happens? Example: sell 2395/2400 and SPX settles at 2397.
- Question from Darqane: Assigned on short SPX puts means getting long the underlying? But how does that work if it’s cash settled?
- Question from Lesnod: How do you get out of the straddles? One side of a straddle is always a loss correct?
- Question from Bobster: Can you trade options outside of U.S. trading hours?
- Question from ejh4isu: Let’s say you’re short naked a bunch of puts and the trade goes against you, and you don’t have the money to pony up? What can your broker do?
- Question from BULZEYE7: Are options worth it for day-traders? Or just for swing-traders?