Synthetics
Butterflies Calendars Desk Notes Diagonals Synthetics
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Broken-Wing Butterflies: Where the Risk Really Goes
A broken-wing butterfly is a standard butterfly plus a credit vertical. A rules-first guide to where the risk moves, how to calculate the broken-side max loss, when the shape makes sense, and common mistakes, with simple illustrative numbers.
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Early Assignment and Dividends: When Your Short Call Gets Exercised
Early assignment follows a simple test: a holder exercises when an option’s remaining time value is worth less than the dividend or interest they gain. A rules-first guide to dividend risk on short calls, deep in-the-money puts, what assignment does to diagonals and spreads, and how to manage it, with simple illustrative numbers.
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Put-Call Parity in Plain English
Put-call parity ties every call, put, and share together. A rules-first guide to what it says, why it has to hold, what pulls on it (rates, dividends, borrow, early exercise), conversions and reversals, and how to spot defined-risk spreads that are secretly the same trade.
