Answer!

“Rolling” An Option Position

Rick S. asks, "I have seen you post comments that refer to "rolling" positions the week of expiration. What exactly is that?

The Problem With Option Limit Orders.

Today Don G. states, “I don’t like to place market orders because I always seem to pay more than I should. However, when I place a limit order I rarely…

How Do Market Makers Pin A Stock Right At The Strike Price During Option Expiration?

Can you explain how Market Makers manage to keep a stock flat lined right at a strike price on options expiration day?

Exercise, Assignment and Spreads

Today Rick W. asks, “I don’t understand what I’m supposed to do when I have a spread and I get assigned on one leg of the trade.”

How Can I Use Options To Capitalize On A Pre-Open Move?

Yesterday a stock dropped 21% during premarket trading due to an earnings "miss". I wanted to buy a put option figuring it would increase 450% in value as the stock…

How Does Assignment Work?

Robert states, "My question regards the assignment of options. I'm not exactly sure how the dynamics work and how to determine if I'm in danger of being assigned. Suppose I…

If The Stock Option Liquidity Is Poor, Can I Get Screwed Out Of Profits?

Let's say I've picked a very liquid stock (1 million shares average daily volume) with little option liquidity. I've bought 10 contracts for $3.00 and there isn't any buying or…

Doesn’t Stock Option Trading Require The Use Of “Greeks”?

Why don't you talk much about the Greeks?

The Options On NWS Are Unusually Priced. Is This A Covered Call Opportunity?

I am having trouble understanding exactly how non-standard options trade. For example, there is a non-standard option trading on NWS for January VJCAE that is for 200 shares of NWS…

How Do I Determine A Spread Price?

Today Jackie V. states, “I traded a bull call spread of the Russell 2000. I purchased the 710 Dec Call and sold the 720 Dec call. It is trading @…

Will Penny-size Option Quotes Help Traders?

Today Joe M. asked, “What are your thoughts on exchanges quoting options in pennies instead of nickels and dimes? It seems like it should narrow the spread.”

Implied Volatility

Today Paul sends the following, “I really want to understand option volatility. I have looked at it from every side and have even subscribed to sites that compute volatility, but…

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