<p>I am not really a coffee drinker…but I thought you could buy a regular cup of coffee for a buck or two?</p>
<p>Why do I have to get out of the put spread? But yeah when I typically put this kind of trade on, I get out of both. However on my spreads that were going to expire on Friday, I kept the 485 puts that I sold to collect the entire amount -somewhat dangerous in that I sold the 505 puts so I’ll get assigned if aapl gets to 485 on Friday.</p>
<p>Doct… if the stock rallies back after you get out of the call spread…you are going to be short…</p>
<p>Depending on how much the stock rallies back…</p>
<p>You can lose size…</p>
<p>Think about it…</p>
<p>Dstark: since you were a market maker, explain this to me. I put in an order to sell a call spread for a net credit of 6.00. By accident, I put it in as a net debit but quickly corrected it and changed it to a credit. The trade was executed for a net credit of 5.91 not a big deal but I don’t completely understand it. I get that if it is a debit, the 5.91 is a better price but it was clearly a credit as my account was credited with 5.91. When I called the broker, they said that even though I changed it, 1 leg of the trade had already gone through as a debit and could not be changed. How does this work and does it make sense?</p>
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<p>Yes. I bought a large at Dunkin Donuts today for $2.06. I’d guess that you could go to one of the fast food places without premium coffees and get something for a little over a buck if you wanted to. Many years ago, a McDonalds coffee was something like $0.75 and it tasted like it was worth every penny. Now they have premium blends and they cost more. I only got coffee at McDonalds or Burger King in the past when they were in a highway rest stop and there was no other choice. It was only to stay awake and I’d live with the taste. These days, if there is no good coffee, I go to the truck stop place which is usually better than the worst stuff.</p>
<p>BCEagle91…ok good…then what I wrote about coffee makes sense. :)</p>
<p>Doct…if you don’t understand post #143… You are going to have bigger problems than post #144.</p>
<p>Post# 144 is not really a market maker question.</p>
<p>Without actually knowing what happened…it looked like when you switched from a debit to a credit…it was too late to get out of the debit trade. You had already done part of it and it cost .09 to get out of that trade. And you are charged that .09 because you entered the order and it is your responsibility to enter it correctly. So 5.91.</p>
<p>I have made this mistake myself many times. For .09…in the electronic age…i don’t think anybody is going to bust that.</p>
<p>Somewhere in your confirms…may be the answer. If you are being charged…there should be a record of that loser…the price you paid and the price you sold…</p>
<p>Also…the .09 might be the commission cost…</p>
<p>No they gave me the explanation that I already wrote. It effectively went in as a debit even though my account was given a credit.</p>
<p>I understand what you are saying in your other post but if it rallied up again I would get out of that spread also - obviously I would only hold onto it if I had a profit which means somewhere inside the spread or below the lower price.</p>
<p>I know that but you entered the trade as a debit…right?
Did you ever get a nothing done on the debit side?</p>
<p>The firm should have just said too late…you bought the spread…and you would have had to sell twice as much of the spread to get the poistion you wanted.</p>
<p>I don’t remember a firm ever executing one vside of a spread for me and then scratching that one side of a spread for me…so that is peculiar…</p>
<p>One more thing about the Aapl trade…</p>
<p>Premiums are the highest right at the strike price so…</p>
<p>If you go and close out both the call and put spread… if the stock hits
530 and you are buying that 530 put…and 600 call…</p>
<p>The odds are very high that there will be an additional cost to close out…you will pay a premium to get out…</p>
<p>You can check by playing games with the marches that expire in 3 days to see how this would work.</p>
<p>Doct…no…you better write down various scenarios…if the stock is 530 what is the put spread worth…if the stock is 540…what is the put spread worth…etc…</p>
<p>You are flat out short if you only close the call spread when the stock hits 530. </p>
<p>The call spread makes you long and the put spread makes you short…and the
combination makes you long or short or neutral depending where the stock is…and time to expiration…and volatility also hsve an effect…but you can forget time and volatiity to get a general idea where you are
depending on the price of the stock.</p>
<p>Just use 530… 540… 550 for Aapl…what is the spread worth? That should be enough data points.</p>
<p>Yes and its quite easy to calculate the breakeven pt on the spread at expiration but not so easy before. I usually do not hold anything till expiration. The times that I have used a combination call and put spread has typically ended in a way that I would have been better off just owning the calls without any spreads because the stock is always going up. Also I’ve pretty much always sold both spreads at the same time before expiration and at a higher stock price so I do not typically get the maximum gain even though the price is above the call that I sold because of the time value. Well thanks about the debit and credit discussion. I may have done this before and not paid attention thinking it was something with commission. I definitely will not make that mistake again. It only cost me .09 but it could have been much greater if they had gotten me a “better” price.</p>
<p>Doct…</p>
<p>Spreading is for people who don’t know where the stock is going. :)</p>
<p>That’s a very old joke.</p>
<p>One of my favorite companies…because of ethics.</p>
<p><a href=“Opinion | Why I Am Leaving Goldman Sachs - The New York Times”>Opinion | Why I Am Leaving Goldman Sachs - The New York Times;
<p>I’d be concerned if I were a GS client…</p>
<p>Ellemenope…</p>
<p>Good point…</p>
<p>I am amazed…that clients haven’t figured out how firms like GS are making money off of them.</p>
<p>Good link.</p>
<p>BTW, I can look candidates in the eye and say that it’s a great place to work and raise a family where I work. Easily. It’s a tough place to work but that’s assumed.</p>
<p>Reminds me of the stuff that came out about Enron after their collapse.</p>
<p>“BTW, I can look candidates in the eye and say that it’s a great place to work and raise a family where I work. Easily”</p>
<p>That’s a huge plus…</p>
<p>We spend so much time of our lives in the workplace…the culture of a firm is really important…at least to me too.</p>
<p>Is this so different from LIAR’S POKER, practically a dinosaurus book now, grace of former employee Michael Lewis?</p>
<p>The scariest issue to me re GS is the cronyism aspect, how it is infiltrated inside our government and it s policies, IMO more than the other firms. Coupled with this, is the government one of those muppets? The citizens, well, you know the answer. </p>
<p>dstark knows I worked on Wall St for 10 CRAZY years…</p>
<p>I thought you worked in the financial business, performersmom…</p>
<p>I did not know you worked on Wall Street…</p>
<p>Or are you using the term Wall Steet as a substitute for the financial industry?</p>
<p>I was talking to a fund manager about GS a couple of weeks ago…
And I said pretty much what the author of the article said…GS puts their profits ahead of their clients…</p>
<p>And the fund manager said, “So? Everyone knows that.”.</p>
<p>No. Everybody doesn’t know that.</p>
<p>The author of the article had a pretty good job at GS. He knows. :)</p>
<p>I don’t like how GS is so involved with the government either.</p>