The GoodiesOne site I've mentioned before is
Another good site is
IVolatility.com. It offers some great tools for scanning through options and identifying opportunities. A few basic services are free, such as an options calculator and quotes. Another nice free feature is its basic option quote page, which provides implied volatility and the historical volatility for the past week and month. For longer time periods, you'll need to pay a $20-a-month subscription fee. This will give you access to data going back to 1999, along with some other tools, such as charting, beta correlation and all sorts of comparison graphing capabilities. IVolatility.com has a host of other premium services, strategy scanning, spread analysis, etc., that range in price from $10 a month to upwards of $30 a month. Several packages are available. Almost all the services offer a free demo and a trial period. I'd recommend checking out the site and seeing what's available both for free and fee -- in both cases I think it offers some good value. I like that my mailbox is getting filled with more specific scenario propositions -- most are sound and sensible, some are pretty complex but definitely workable, and a few are real creative brainteasers. But all are thoughtful and show good command of options concepts, pushing my own knowledge base along. This provides me a nice segue to what's become a very popular topic: Iomega's ( IOM) upcoming special dividend payment. Hey Steve, is there a free lunch on IOM? I'm looking at hedging a dividend capture scheme. IOM will pay a $5 one-time dividend to holders as of Sept. 15. Theoretically, the stock should fall by around $5 after the dividend. The company has about $9 a share in cash right now, and the stock trades at $11. I bought 1,000 shares and hedged this by buying Sept. 10 puts at the market (75 cents), which I financed by selling Dec. 12.50 calls at $1. This seems to be a risk-free trade that will enable me to capture the 40% dividend, unless the shares trade above $12.50 before Sept. 15, and the call owner calls me, in which case I might lose the opportunity to capture the dividend. Am I missing something here, but who was willing to sell me the Sept. 10 puts, since it really does seem likely that the shares will fall after they go ex-dividend? Thanks, -- DP The dividend will be treated much like a stock split with option strike prices adjusted accordingly. Those who are short stock (or short calls or long puts exercised before the ex-date) will be responsible for paying the dividend. Details can be found here. Without going through all the specifics of the prices, the quick answer, sadly, is there is no "free lunch." Funny how rare and short-lived those are in the options world, huh? The reader is essentially describing a collar in which he should lock in any unrealized profit from the long stock and possibly collect the 25 cents net credit of option premium sold. Keep on writing and I'll keep on answering, and we'll all be better for it.