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.

learn more… | top users | synonyms

3
votes
2answers
34 views

Question about option chain

https://beta.finance.yahoo.com/quote/GOOG/options?ltr=1&date=1516320000 OK, can't I just SELL "350 @ $395 and BUY "340" @ $391 and pocket $4 immediately and realize another $10 if and when the ...
0
votes
0answers
12 views

Pricing American Options in Continuous Time Framework

As part of my project i need to create a model to price American put options in continuous time framework. Any ideas how to start? Any good read?
0
votes
1answer
48 views

How much money are you actually trading with options?

In my Investments class we are trading options. I bought a TSLA call option for 8.80. I know that options come bundled in groups of 100. So did I actually invest $880 or did I only invest 8.80? I sold ...
0
votes
1answer
20 views

Where can I buy European-style options?

My broker (Ameritrade) makes several options available in their platform (thinkorswim). It seems like these are mostly American options (can be exercised at any time). There does not seem to be any ...
0
votes
4answers
103 views

Comparison between buying a stock and selling a naked put

Suppose one wants to invest in company X, whose stock is selling for, say, $100/share. What are the differences in profit potential between buying 100 shares and repeatedly selling a naked put at ...
3
votes
2answers
164 views

Will my money be safe in my trading account during a market crash?

I am an options trader. Imagine when I am peacefully trading on my trading account with my broker, the market collapses and causes a recession or depression. Now can I continue to trade during the ...
0
votes
2answers
46 views

If Option prices are publically quoted on an options exchange, why do people use Black-Sholes to estimate their price?

I always wondered why the Black-Sholes-Merton model was used to estimate the price of European-style options when their prices are available on quoted exchanges? I think I am missing something big ...
0
votes
4answers
95 views

How liquid is options market?

My strategy invloves making profits by the increase in "Implied volatility" through long straddles/strangles. Enemy: Time decay. I am aware that the time decay accelerates. I read, For a 9 month ...
0
votes
1answer
42 views

How disciplined are companies in sticking to the announced earnings announcement date?

My options strategy depends on the earnings announcement date. Do all companies disclose earning announcement dates well before the date? Or do they announce as a surprise? How often do they ...
0
votes
2answers
42 views

Is there strategy to qualify stock options with near expiry date for long term capital gain tax?

I am trading stock options. Typically I hold them for few weeks; sell them and wait for the next opportunity to trade them again. However, now I have been wondering - is it possible somehow to ...
3
votes
1answer
36 views

Why do some expiration dates have more open interest for options?

Looking at the options market I noticed that some expiration dates have a lot more open interest than others. A good example is April 15th. Almost every company I've looked at has a very large open ...
2
votes
1answer
29 views

Is there a way to see how much leverage a mutual fund or ETF is using to generate a return

I am taking over some of my IRA and 401K money and I want to move towards a more value based approach with an emphasis on dividends. One thing I have learned on this quest is that most options have ...
1
vote
0answers
14 views

Reporting of 1256 Based Options

I live in the United States. In 2015 I have traded several 1256 based options. The details of each trade were not included in my 1099 and not imported into Turbo Tax. I understand that this is to be ...
0
votes
2answers
79 views

Is it possible to know the probability that a trade is successful?

I'm trying to model the distribution of different outcomes of day trading every day for a year. I'm starting with $350 dollars. I'm only doing options trading on Apple stock with a 5% stop loss and a ...
4
votes
1answer
167 views

How can I bet against oil in the long term?

I want to bet against oil over a long term period (5-10 years, let's say). What is the best way for me to go about this, i.e what should I purchase and how?
0
votes
1answer
45 views

Capital gains tax on 1256 based options

If an investor writes a 1256 based option $1000 in January and the option expires worthless in February that is a capital gain. Is it true that, since it is 1256 based, that the capital gains are ...
0
votes
2answers
44 views

Call option- premium fall with rise in spot price

The premium of the below call keeps falling although the price is increasing and it still has more than a month until expiry. The current spot price is 392. Shouldn't the in the money strike premium ...
0
votes
3answers
103 views

Is it better to buy put options or buy an inverse leveraged ETF?

Let's say you think the market is heading down in the next 6 months. Is it better to buy put options of an ETF (e.g., SPY) or buy an inverse ETF (e.g., SH)? or a leveraged inverse ETF (e.g., SPXU) to ...
0
votes
0answers
36 views

Why are some calls priced inaccurately?

I'm new to the world of options and my friend noticed this anomaly. The price of a call at 195.00 for TSLA is priced way above similar strike prices (up > 500% today). Is there any reason for this? Or ...
2
votes
2answers
88 views

Hedging against an acquisition of a stock

Let's say I have done research and have a view that a public company's stock will go down due to worsening fundamentals. So normally then, one can express that view by shorting the stock. However, ...
0
votes
0answers
11 views

Bid ask spread on a mutual fund containing derivatives

On mutual funds with bid and ask prices, It is my understanding that these prices should be close to the bid and ask prices of underlying securities according to their weights in the fund, divided by ...
1
vote
1answer
182 views

Tropical Trade Stock Trading

Is Tropical Trade a valid stock trading company? I would like to start investing but I want to know the validity of the trading company.
0
votes
2answers
65 views

Open Interest vs Volume for Stock Options

Wanted to double check my intuition - What if there is only one trading day and the volume is smaller than the open interest on that one trading day. This is assuming there is no open interest before ...
0
votes
1answer
81 views

Anyone know if IG or Plus500 are scams or not?

I have been doing some research into online trading and came across 2 platforms that are pretty good and user friendly. http://www.IG.com and http://www.plus500.com I have read quite a lot of reviews ...
2
votes
5answers
229 views

Should a strategy backtested against three years of tick data continue to produce positive results?

Let's say we have a Binary Options 5-minute trading strategy that relies on multiple indicators and exploits price reversals in currency pairs. Now let's say there is a combination of inputs for the ...
3
votes
3answers
69 views

Options profit calculation and cash settlement

I have a question regardnig call options. For example: 108-strike AAPL options expiring Dec 24th are 83 cents. That means the cost of one contract would be 83 + 5 (commission) = 89 dollars ...
1
vote
3answers
78 views

Unemployment Insurance Through Options

Both Kyle Bass (from about 8:00 - 9:40) and Mark Spitznagel discuss an approach to finance where an investor takes a small percentage of their wealth and bets on an unlikely outcome, expecting to lose ...
3
votes
1answer
55 views

What happens to a call option in a cash/stock acquisition?

Let's be specific. I hold April 2016 135 calls for CB (Chubb). CB is being acquired by ACE. The deal is $62.93 per share in cash and 0.6019 share of ACE stock for each share of CB. The deal is ...
0
votes
3answers
93 views

When can we exercice an option?

Can we only exercice an option when it expire ? For exemple I have an Adobe option with a strike price of 87.50$ and expiring on 2016-01-15. Adobe stock have already raised above my strike price. ...
1
vote
0answers
50 views

Trading intraday fluctuation vs. volatility-based option

Recently a question was asked about actively trading stocks based on small fluctuations in price. It seems like if you wanted to do the strategy described here, you might as well buy an option like a ...
0
votes
0answers
42 views

Yuan USD Option

Are there any possibilities for a retail investor to buy a USD/Yuan option other than the ones on the CYB ETF and those from Goldman Sachs? The idea is to bet on a lagre depreciation of the Yuan.
2
votes
5answers
913 views

Options vs Stocks which is more profitable

Assuming I enter a stock at $100/share. The stock goes up 3% over the course of two days, I then sell the stock and collect my profits. How would this compare to me buying a call option contract for ...
3
votes
1answer
65 views

Taxes, Puts and the Wash Rule

If an investor sells a stock at a loss and on the next day, he sells a put on the same stock, does the selling of the put trigger the wash rule? Does it matter if the put was sold out of the money? I ...
1
vote
1answer
133 views

Berkshire Hathaway and Covered Calls

An investor owns several shares (like 2 or 3) of Berkshire Hathaway Class A shares. He sells 5 call contracts on class B shares and then buys them back at a loss. For purposes of taxes, were the calls ...
0
votes
2answers
64 views

How is the time-premium on PUT options calculated

I have some PUT options in AAPL, and I thought I understood how options pricing worked on a basic level but I must be missing something. Today the AAPL stock dropped $3.38, and I expected my PUT ...
0
votes
3answers
72 views

Emulating a 'long straddle' without buying or selling Options?

If I go long and short a stock simultaneously, with a 1:50 leverage, and place a stop loss on both for when a 10% loss is reached, isn't this the exact same principle as the long straddle strategy ...
0
votes
1answer
76 views

VEF/USD trading option

Does there exist a VEF/USD (Venezuelan bolivar) spot or derivative market on any public exchange?
1
vote
5answers
127 views

Why do I get a much better price for options with a limit order than the ask price?

When I'm buying an option, I notice that if I set a limit order for in between the ask and bid - say half way, I can often get the option at that price. Why is it that way? I thought the ask price ...
3
votes
4answers
622 views

Is selling put options an advisable strategy for a retiree to generate stable income?

Suppose a retiree wants to generate stable income from selling S&P500 (or other stock index) put options. Is this an advisable strategy for a retiree?
0
votes
0answers
46 views

Where is the liquidity on European derivatives exchanges

This has bugged me for a long time, and I feel like I am missing some information. When I browse Eurex, a derivatives exchange in Europe, I don't see the kinds of liquidity I would expect. For ...
3
votes
1answer
62 views

Is it commonly possible to buy an “Option for a Mortgage at a specific Interest Rate”?

I'm newer to investing, but I've come across options contracts now and then which to my understanding allow the option to buy or sell a stock at a certain price. After a discussion with a coworker at ...
1
vote
2answers
32 views

Is there an online tool to help purchasing option spreads? [closed]

I'm pretty new to futures trading and I'm wondering if there is an online tool to help look at various spread options contracts? I'm interested in getting some experience trading futures with pretty ...
0
votes
2answers
98 views

How safe is an option contract?

I know the Options Clearing Company guarantees the fulfillment of every option contract and it never happened that a option contract defaulted in history. So what could you imagine must happen so a ...
0
votes
0answers
63 views

Hong Kong Dollar Options

I would like to bet on a de-pegging of the Hong Kong Dollar from the USD. Even though the volatility is perfect for an options trade, it seems hard to find any for the retail investor. Is anyone aware ...
2
votes
1answer
86 views

OTM puts or ITM puts in fear of market crash

If I own some shares, but at the same time I am afraid of a market crash, should I buy OTM puts or ITM puts?
1
vote
1answer
318 views

How can I calculate the exposure of future option? [closed]

quantity * delta * index quantity * delta * (index - strike) quantity * delta * min(index - strike, 0)
0
votes
2answers
143 views

May I Invest as a non accredited investor?

I want to join a website where they allow only accredited investors to participate in investments that they manage. I am not an accredited investor. However, in the past, I worked for the company and ...
1
vote
1answer
239 views

How is SPAN and Exposure Margin Determined on the NSE?

Recently, I have been reading up a lot on writing options as this is something I am interested in. I came across a span margin calculator which asks me to enter the contract and it automatically ...
1
vote
2answers
92 views

Do Options take Dividend into account?

Suppose I own a contract with a market lot of 100 shares in company A and company A goes ex-dividend during the validity of the contract. That means, that theoretically the price of company A will ...
3
votes
1answer
82 views

Do European options have to be exercised at a specific time on Expiry day?

European Options as compared to American Options can only be exercised on a certain date. As I want to start writing options, I want to know whether it can be exercised by the buyer at anytime during ...