[quote=Spaceman Spiff]We do IPOs.  They’re just not all that frequent.  When we do participate it will be with companies like utilities or something boring like that. 

  We're more likely to be the underwriter on a bond issue than a stock.  [/quote]   not that frequent.......talk about an understatement c'mon tinkerbell you can up with a better response than that.....check out your handy dandy ej version of history. 

squash,

  Reading comprehension has ALWAYS been a problem with the boys in green.   This thread is about O P T I O N S   I heard you were not a fast reader either so I hope you don't mind if I slowly spelled it out.

Evidently your reading comprehension isn't all that good either.  If you back up one page and look at the post OS made, it referenced IPOs.  Which is the only reason I responded back to her. 

Tinkerbell?  That's twice now.  I must have hit a nerve of some kind.  I love it when guys like you run out of intelligent things to discuss, and then resort to outright name calling.  My daughter gets made at her sister once in a while and calls her names too, just like you did with me.  Hmm...I wonder if there's a maturity correlation?

[quote=iceco1d]Buy&Hold - You are correct with the zero sum of options (i.e. I sell you a call, on exercisee/expiration, your gain is my loss, and vice versa).   But what you are missing is thee time value component that Gaddock mentioned.  If you are long an option, you are holding a depreciating asset.  The closer to expiration, the less valuable your asset becomes.  I believe, if I’m following Gaddock correctly, this is one of the characteristics of options that he’s exploiting.

  In addition, the situations he is creating with his clients is something like this...   G:  Mr. Client, are there any stocks out there that you'd like to own...good quality companies?   C:  Sure.  I wouldn't mind picking up some XYZ stock.   G:  Well, Mr. Client, at what price would you be comfortable buying XYZ at?   C:  I'd buy it if it were $50 a share or less.   G:  OK, here's what we'll do - lets sell some $50 puts on XYZ.  Right now we can get $3 per contract (obviously completely made up numbers).   C:  Huh?    G:  Mr. Client, you want to buy XYZ if it gets to $50 or less, right?  When we sell these put options to other investors, we are giving them the right to force us to buy 100 shares of XYZ at $50 a share.  This is the price you said you were willing to pay.   C:  OK?   G:  So 2 things can happen.  The price of XYZ drops below $50 (say, to $45), and the investor that is long the put option forces us to buy it at $50, instead of the cheaper market price of $45.  That's OK with us, because you just told me that you would own XYZ at $50.  So we are going to get a high quality stock, at exactly the price you want.   C:  OK?   G:  The other possible option is that XYZ doesn't go down to $50 and the option we sold expires.  Remember, we sold that option for $300, and the buyer didn't end up using it.  The bad news is that we didn't get to buy XYZ at $50, but that's OK because we don't want it at a higher price than that, right?   C:  Right...   G:  So in that case, you just get paid $300 and have a nice day.  if you still want to try to buy XYZ at $50, we'll just sell more put options.  If it drops, we finally get to own the stock @ $50 (yes I'm ignoring basis here) - if it doesn't drop, then you get paid another $300 to do nothing!   C:  Wow Gaddock, you are really smart, here's my money.    Get the point?  There are plenty of other strategies out there, but this is just one of the simple ones.   Gaddock - I think you are a prospecting animal, and I think you are learning a great deal about options - Kudos on both counts my friend.  However, you have the worst spelling I've ever seen!  [/quote]   BINGO!!!!!!!  The only thing worse then my spelling is my typing on this ancient laptop with tow little baby girls climbing all over me. Well said.   I've been killing it with the options. One more thought ... there are so   oh so many ways to worm out of a bad position that it blows me away. I've got 50 something on to expire next Friday and I think I'll only be buying 2 or 3 (that we wanted to begin with) the rest will be banked. And so starts the process again for Jan. as December is already getting a full deck.

[quote=Spaceman Spiff]Evidently your reading comprehension isn’t all that good either.  If you back up one page and look at the post OS made, it referenced IPOs.  Which is the only reason I responded back to her. 

  Tinkerbell?  That's twice now.  I must have hit a nerve of some kind.  I love it when guys like you run out of intelligent things to discuss, and then resort to outright name calling.  My daughter gets made at her sister once in a while and calls her names too, just like you did with me.  Hmm...I wonder if there's a maturity correlation?[/quote]   Sorry Tinkerbell (3X) I went to the VERY first post and skipped over the IPO question.  my bad.  In this type of market, options are a bit more logical than ipo's, wouldn't you agree?   No Tinkerbell (4X) no you didn't hit a nerve. You are just a sanctimonious lacky that obviously can not think for himself and posts quotes from the ej handbook.  As soon as someone catches you simultaneously sucking and blowing in one thread you jump into another one and leave the other one unanswered...... (OIT)   options aren't profitable? when was the last time your firm executed one? When was the last time you bought/sold personally  let alone worked it out for a client that held one?   What you think your GP don't trade in options for themselves??? You must also believe that nobody at your firm holds accounts at other firms either (yeah right)   The reason I call you TINKERBELL (5X) is that you live in a fantasy land (of green)...    

[quote=compliancejerk][quote=Spaceman Spiff]Evidently your reading comprehension isn’t all that good either.  If you back up one page and look at the post OS made, it referenced IPOs.  Which is the only reason I responded back to her. 

  Tinkerbell?  That's twice now.  I must have hit a nerve of some kind.  I love it when guys like you run out of intelligent things to discuss, and then resort to outright name calling.  My daughter gets made at her sister once in a while and calls her names too, just like you did with me.  Hmm...I wonder if there's a maturity correlation?[/quote]   Sorry Tinkerbell (3X) I went to the VERY first post and skipped over the IPO question.  my bad.  In this type of market, options are a bit more logical than ipo's, wouldn't you agree?   No Tinkerbell (4X) no you didn't hit a nerve. You are just a sanctimonious lacky that obviously can not think for himself and posts quotes from the ej handbook.  As soon as someone catches you simultaneously sucking and blowing in one thread you jump into another one and leave the other one unanswered...... (OIT) - My apologies for not answering your post in a timely manner.  I had client meetings from 11:00 - 8:00 on Friday.  I'll try better in the future to work my schedule around  your posting times.    options aren't profitable? - If handled correctly I'm sure they can be when was the last time your firm executed one? - I'm gonna say early 70's if they ever did When was the last time you bought/sold personally  let alone worked it out for a client that held one?  -  Never    What you think your GP don't trade in options for themselves??? You must also believe that nobody at your firm holds accounts at other firms either (yeah right) - No, I'm pretty sure that some of them do.  In fact options might actually be a reason someone might have an outside account since it is something not available at Jones.    The reason I call you TINKERBELL (5X) is that you live in a fantasy land (of green)...     [/quote]   Well, I could have just spouted off my opinion on the issue and floated a bunch of conjecture out there, but it would have been just that.  I thought it might be more helpful to the OP if I showed him why Jones doesn't do options.    Do me a favor, go back to my posts from this thread and put up a quote for me that shows where I gave my personal opinion on options, other than the one in fantasy land green above.  When you can find one, we can continue this discussion, Mr. Smee. 

[quote=kujhawks300]

Can anyone explain why Ed Jones is against options?  Do they not fully understand them. There are time when protective puts work and even more time so write a covered call.  These strategies reduce risk.

Someone from Jones please enlighten me.

[/quote]   Well you've  seen the response from someone at ej who quotes from the party line and me, who used to work at ej.  To re-iterate my answer is simply, overhead.   If this particular firm engaged in options the problem areas would be: 1) supervision (the firm has enough headaches in this area e.g.  Ed Hood in TN. He was a GP excellent reading material on FINRA - Know You Broker section) 2) education and continuing ed.   I apoligize to everyone out there for allowing my distaste for my previous employer and it's self-righteous, blindly following kool aid swilling hoard to upset and goad me on.      

However, when the decision was made, there were very few brokers who would have to have been supervised.  The opinion that was offered by Bachmann and the decision that was ultimately made by Ted was made without, I would guess, thought for cost or compliance issues. 

  Today, it would be a compliance, cost, and supervision nightmare to add options trading to the list of products and services.  You're points are spot on.    Now, can we bury the hatchet and be done with the name calling?

[quote=Spaceman Spiff]However, when the decision was made, there were very few brokers who would have to have been supervised.  The opinion that was offered by Bachmann and the decision that was ultimately made by Ted was made without, I would guess, thought for cost or compliance issues. 

  Today, it would be a compliance, cost, and supervision nightmare to add options trading to the list of products and services.  You're points are spot on.    Now, can we bury the hatchet and be done with the name calling?[/quote]   Yes Spiff,   I don't know what I was thinking.  I should always go to the history books of your employer to gain the truth.  Once your firm makes a decision NOT to do something, it is carved in stone forever and should never be reconsidered.   (fee based, satellite based communications, etc.)