Saving money with combination orders

If you ever plan to trade more than straight long options you should learn to use combination orders, specifically debit and credit orders. . A combo order allows you to execute multiple trades simultaneously at a single integrated not-to-exceed price.  Some examples: Creating a simple covered call position, buying the underlying equity and selling-to-open calls Creating a call bear option spread, selling the lower strike …

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Weekly options for the masses–SPY, QQQQ, IWM, DIA and others

Anyone that trades options knows that the pace quickens the last few days before expiration.   The delta (the change in option price relative to the underlying)  for the ATM option is still around .5, but instead of gradual changes for the deltas on the strikes in / out of the money, the curve starts resembling a step function, going from zero for out-of-the-money, to …

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Dividend capture with covered calls—too hot, too cold, or just right!

If you have general questions about dividends see Top 10 questions about dividends. One strategy for capturing dividends is to buy the stock/ETF and then sell calls against that security as a hedge—a covered call.  The value of the short calls moves in the opposite direction of the stock/ETF, providing a hedge.   There are three major variables with this strategy: 1. How many days before …

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