This tag is to be used for any question on Options, A more specific tag [put-options, call-options, options-assignment, option-exercise] should be used when appropriate.

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Is the education provided by OIC good

Does anyone have experience with the educational courses provided by options industry council? What is the quality of the material? Is it just another option course talking about some magic ...
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0answers
14 views

Retail bokerage sites that can help with Flex/CFlex Options?

Does anyone know if there are retail brokerage companies that can help with creating Flex/Cflex options? I am looking to create LEAPs on an ETF. I found the following link about "List of CFlex 2.0 ...
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1answer
21 views

Why at the money option has higher theta than out of money option

Why is the theta highest for the option at the money(22.50 in the screenshot), but decreases as we go further out of the money? I understand that ITM have little time value, so they will have small ...
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1answer
36 views

Why gamma scalping is not advised for retail traders with reg T margin

I am trying to understand gamma scalping Why does the author say: Only traders who are very well capitalized, very knowledgeable and experienced, and who have retail portfolio margining should ...
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1answer
42 views

Why are there no exchange traded options on 3x leveraged ETNs

Since these would help me manage risk in my personal financial portfolio, why are there no exchange traded options on 3x leveraged ETNs? Is there a prohibition that the SEC is perpetuating? Is there ...
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1answer
27 views

Close an option position after getting an early assignment notice

If I sell an option, and the option goes in the money prior to expiration, and I get hit with an early assignment notice, can I still close out the option after I get early assignment notice? I was ...
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2answers
49 views

Options liquidity and trading positions larger than the daily volume?

I want to open and close an options contract position that would be larger than the daily volume and open interest for that particular contract and expiration date. Would my broker or other market ...
-1
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1answer
36 views

How to sell large amount of options?

If the amount of contracts to sell is about 2-3 times the average daily volume, the bid size is usually higher than the contracts to sell, the ask premium price is about 8% above the bid, how would ...
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0answers
21 views

How many naked option contracts can I write if I want to use maximum margin

Let us say I want to write a naked option on SPX in my interactive brokers margin account. If this is the only position I wish to hold in my account, and I want to use maximum margin, then what is the ...
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1answer
66 views

Trade stocks in USA

What are the conditions for foreign citizens (and non-residents) to trade on American exchanges? I believe it's possible, but don't know the conditions...
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1answer
26 views

Why Gamma shares an inverse relationship with volatility

At this TOS tutorial On page 3: Tom Preston: Gamma increases when the option is at the money, the option is close to expiration or volatility is low I am confused about 'volatility is low' ...
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38 views

Calculating greeks from given option information

I have some software that spits out information about an option. Strike, underlying information, etc, but I cannot get the greeks using this software. Given that these are American options, is there ...
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1answer
35 views

How splits and dividends affect option prices

When a stock goes through a split or offers a dividend, do the option prices automatically change? If yes, how? A 2 for 1 split will automatically halve the option price? A dividend of 1$ will ...
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1answer
26 views

Option spreads in registered accounts

Are there any option brokers for canadian people that allow you to do credit and debit spreads in their rrsp and Tfsa accounts?
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1answer
219 views

Does weekend count for option decay?

Does sat/sun also decay the value of options or just days the market is open?
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2answers
94 views

Trading : how to deal with crashes (small or big)

i'm currently learning how to trade both manually and with EAs. I have questions : i'd like to know how to deal in the probability of a price crash like in 1987 (and many others): Is using a right ...
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1answer
49 views

Why is the terminology “put” and “call” not applicable to futures contracts?

Why is the concept of puts and calls applicable to options, but not to futures? Futures and options are similar, the key difference being that futures represent an obligation, whereas options ...
2
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1answer
30 views

Option settlement for calendar spreads

Hypothetical: let's say it's Jan 17, 2015 and AAPL is at 100. My portfolio contains: Long 1 Jan 23, 2017 Call Option for AAPL at 60 Short 1 Jan 17, 2015 Call Option for AAPL at 90 20,000 USD cash ...
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1answer
121 views

How to record a written put option in double-entry accounting?

I have been using double-entry accounting to carefully track my financial situation for a couple of years now, but I am just dabbling with stock options for the first time. I wrote a put option (sold ...
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3answers
79 views

If a put seller closes early, what happens to the buyer?

If an investor buys a put option to protect their long position, but the seller closes the position before expiration (if it gets close to being in the money), does that eliminate the buyer's ...
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3answers
97 views

Why does financial investor bother to buy derivatives and then hedge the position?

I am recently studying mathematical finance, and I am not really familiar with how the financial system works. This might be a naive question: when reading some books on mathematical finance, ...
2
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1answer
36 views

How to bet that INR will gain in value

If I want to bet that in the next 3- 5 years, under the new government, the INR will recover most of its values against USD (a.k.a 1 USD = 50 INR), what investment/trading/betting options are ...
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0answers
29 views

Do I need to close out an in-the-money short straddle?

If I am short both a call and a put with the same strike on the same security, what happens if I let this position expire in-the-money? How much, if any, cash would I need to have liquid at ...
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1answer
33 views

Why does option with lower delta move more?

Shouldn't an option with a lower delta move less than one with a higher delta? The spy 208 jan put option has a lower delta than the 209 jan put. Why does the 208 have a larger range? low ...
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0answers
36 views

Choosing a strike price when you sell a short combo

Often different stocks that I want to short are not on my broker's "easy-to-borrow" list, so they are unavailable for shorting. A couple weeks ago I got serious about option trading and I found out ...
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2answers
261 views

How to sell a worthless option

I have a call option that will expire as worthless in January but I'd like to sell it now and realize the loss this year to lower this year's capital gains taxes. I would be happy to dump it at $0.00 ...
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2answers
105 views

How does a delta neutral portfolio make money

This is a really basic question,so I apologise. If I have a delta neutral portfolio consisting of an option and its underlying, such that any move in the option is cancelled by an opposite move in the ...
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1answer
26 views

Clarification on options jargon regarding spreads

Is it true that a bull put spread is the same as a credit put spread. Because if I am bullish, I wont be buying the put spread, I will be selling it, so it has got to be a credit spread. Similarly , ...
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1answer
35 views

Putting a calendar spread as a limit order

If I want to put on a calendar spread as a limit order at interactive brokers, am I allowed to specify a limit price for the spread, or do I need to specify limit prices for each of the individual ...
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2answers
43 views

Is the phrase 'sell premium' another way of saying 'sell an option'

In options lingo, when people say 'sell premium' or 'short premium', they pretty much mean selling an option, correct? i.e Sell premium is just another way of saying 'sell an option'
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1answer
35 views

Trade options on index or the ETF that tracks the index

What is the criteria one should use before deciding on an underlying to trade options on: 1.Options on SPX (Cash settled, European style) 2.Options on SPY ( Settled in SPY shares, American style) ...
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1answer
52 views

Are option contracts subject to mark to market rules

When I buy or sell an option contract, am I subject to futures style mark to market rules...i.e if the position moves against me, will the broker issue a margin call to put up additional collateral, ...
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1answer
30 views

Exercise an out of the money option

For listed options in NYSE,CBOE, is it possible for an option holder to exercise an option even if it is not in the money? What about early exercise for OTM American option, is it possible? Under what ...
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1answer
87 views

How does AMT/state taxes work for stock options in California?

I'd like to know how to roughly calculate tax for stock options, for the following fictitious scenario: Suppose Little Susie joined a rare private company in California as a normal employee, and ...
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1answer
32 views

Time premium of at the money options

What is the reason that at the money options have the greatest time premium? I am not mathematically inclined, is there a way to understand this intuitively?
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17 views

Covered call and put options as separate trades

Let's say I write a covered call and a buy separate put option. After a period of time, the call expires, leaving me with the underlying stock. Thereafter, the market price went down and I can ...
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2answers
63 views

How to tell if an option is expensive

How to tell as a rough estimate if an option is expensive or not? For stocks, you can compare P/E multiples with similar stocks to estimate whether a stock is expensive w.r.t its sector. But with an ...
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1answer
31 views

Volume of at the money options

What is the reason that at the money options have the highest option tradng volume? Is it just a coincidence?
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22 views

Can a weekly and a monthly option expire on same date

Does the expiration date of a weekly option and a monthly option ever coincide? What about the expiration date of a monthly option and a LEAP? I.e if there is a monthly expiring in the third week of ...
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1answer
31 views

What happens to the put option (longer expiration) of a collar if the call gets assigned?

Assuming a collar strategy where I buy the underlying stock with a short call and long put option on it. Would the call be assigned away like a covered call, leaving the put option viable or would the ...
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37 views

Online options simulator that shows Greeks of a option position in near real time

Is there an online software, maybe a downloadable excel that will allow me to put on a simulated option trade and show me day by day how my position is doing on the P/L curve, how my Greeks are ...
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1answer
78 views

Is an iron condor always preferable to doing a simple credit spread

What is the advantage of using a regular credit spread ( bull put or bear call spread ) over an iron condor? The profit in an iron condor will be at minimum be same as a simple credit spread( when one ...
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2answers
125 views

Do options always expire on third Friday of every month

The Yahoo finance link for SPY options Indicate that these options expire at close of October 31st. This is confusing because I thought options expire on the third Friday of every month. Oct 31st is ...
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1answer
48 views

Is the delta hedging technique of any use for a retail trader

As a retail trader, does it make sense to hedge an option position by taking an opposing position in the underlying? If I buy a long call and short an equivalent number of the underlying so that the ...
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3answers
38 views

does an option trading below parity always indicate an arbitrage opportunity

If an option is trading for less than parity, is it always a mispricing, waiting to be arbitraged, or are there other factors that can lead to this?
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1answer
58 views

If early exercise is a bad idea, why American option is more expensive than European [duplicate]

American options are more expensive than European options because they give the buyer the right to early exercise. But in a low interest environment, early exercise is a bad idea, for most retail ...
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1answer
55 views

When is an option a certain number of strikes in the money? e.g. “two strikes in”?

What does it mean when someone says:this option is one strike in the money or that option is 2 strikes in the money and so on and so forth? I understand in the money, at the money, and out of the ...
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1answer
174 views

Why does shorting a call option have potential for unlimited loss?

Referring to http://en.wikipedia.org/wiki/Option_(finance), for a short call: If the stock price increases over the exercise price by more than the amount of the premium, the short will lose ...
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2answers
53 views

How does delta of an option change with time if underlying price isconstant

In his book 'Option Volatility and Pricing', Sheldon Natenberg writes that if an option has a delta of 92 with 3 months to expiry; and then 2 months pass and the underlying contract does not change in ...
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42 views

Options contract calculator - for non-equities

All of my options calculators are within stock trading platforms, or readily found on the internet and require stock/index symbols. I am trading illiquid options over the counter, on an asset. I have ...