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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2
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1answer
110 views

Notation on a put spread?

I'm reading a document that states the following: 1 year, European, 1250/1000 put spread Does this mean it's a bull or bear put spread?
5
votes
3answers
2k views

Do futures have premium in the price, just as options do?

Looking at Wikipedia's the pricing of futures, I wonder if entering into a futures contract requires one to pay premium just as entering into an option contract? In other words, is the premium of a ...
0
votes
4answers
192 views

Covered call when stock position is at a loss

when writing covered calls and the stock value decreases. Sure your calls decrease to $0 and expire worthless (the desired scenario) but your stock position can continue taking a greater loss. so ...
2
votes
1answer
836 views

Can a loss on the sale of my house offset capital gains tax from stock options?

I've lost a bunch of value on my primary residence. I've got a bunch of vested stock options that, when exercised/sold, will be a substantial capital gains. If I sold my house the same year I ...
1
vote
3answers
922 views

Search index futures in Yahoo Finance or Google Finance

I was wondering if index futures and options information are available in Yahoo/Google Finance. Say futures/options for Dow Jones Industrial Average.
1
vote
1answer
75 views

How to buy options on a specific security?

I want to buy a few call options, in my 401(k), for a specific security. I'm aware of the risks inherent to option trading, and this will be a small part of my overall strategy. Here are my ...
6
votes
3answers
253 views

Buying an option in the money, at the money, or out of the money

How would one make trade-offs between buying a call option a few dollars ITM (in the money), ATM (at the money), or OTM. I mean I understand the plain dollar differences / calculations on the ...
9
votes
2answers
228 views

Are Shiller real-estate futures and options catching on with investors?

Robert Shiller introduced an approach for reducing exposure to macro risks using real-estate derivatives. He created a successful housing price index with help from Karl Case, the S&P Case-Shiller ...
1
vote
5answers
414 views

Option on an option possible? (Have a LEAP, put to me?)

Let's say I am bullish on company XYZ at the current price. I feel like they will go up long term, and are priced well. I can sell a PUT on XYZ at a lower price than it is currently trading (i.e. ...
2
votes
5answers
2k views

Purchasing options between the bid and ask prices, or even at the bid price or below?

For those more experienced options traders, I'm wondering if you can share what you've found in regard to purchasing near, at or possibly below the bid. For example, yesterday in a slightly rising ...
2
votes
2answers
739 views

Strategies to recover from a bad short-term call options purchase where the underlying dropped instead?

If I bought some short-term call options on an expectation that the underlying stock would go up, but instead the underlying stock declined some, shortly after my options purchase, what choices are ...
1
vote
3answers
139 views

Are underlying assets supposed to be sold/bought immediately after being bought/sold in call/put option?

Suppose I am an investor and now buy a call option. At the maturity date, if the strike price is lower than the market price of the asset, I decide to buy the underlying at the strike price because I ...
4
votes
2answers
117 views

How it actually works? Selling a call on a stock I hold, but has done poor, might the market thinks may rise

I currently own a little over 500 shares of a stock which represent a hefty on-paper loss for me. I don't want to liquidate the position. I think that long term that stock may come back up as in the ...
3
votes
2answers
660 views

how does one see the CBOE VIX index on Google Finance?

How does one see the CBOE VIX index on Google Finance? What is a symbol I can use?
9
votes
3answers
5k views

If a startup can always issue new shares, what value is there to stocks/options?

Since in most startups the board can issue more shares at will, what does it mean for an employee to own X% of the shares? When signing up, can an employee protect himself from the company printing ...
7
votes
3answers
224 views

How to get started with options investing?

I have never taken the time to learn about or trade options, and I'd like to give it a shot. IMO, I am a reasonably sophisticated investor; I've been investing in one form or another since I was 11, ...
2
votes
3answers
374 views

Why do put option prices go higher when the underlying stock tanks (drops)?

Why do higher and lower strike prices for options all go up when a stock tanks? I am looking at Apple today (as an example), and with it down $8 today and currently at $376, why would the October ...
10
votes
2answers
8k views

What happens to options if a company is acquired / bought out?

I have some out of the money options with pretty far off expiry dates (Jan 2013, for example). What happens if the underlying company is acquired before then, while I'm still holding the options? Do ...
2
votes
2answers
921 views

Do stock option prices predicate the underlying stock's movement?

I am trying to understand if my thinking is correct or not. I am looking at a stock that is @ $10.00. When I look at the options on the stock $11, $12... calls are all down today and $11, $12... ...
4
votes
2answers
100 views

Buying non-qualified employee stock options that are going to expire?

I have NQ stock options from my employer that have to be exercised in the next few months before they expire. I would like to hang on to them as I have faith in the stock itself. What are my options? ...
4
votes
2answers
136 views

Software tools for options investing

Are there free or inexpensive software tools to assist with common computations or Monte Carlo analysis in dealing with investing in options on common stocks? I probably know enough to write ...
5
votes
1answer
314 views

Options for the intelligent but inexperienced

(Related to "Options for Dummies" and "What are some good options strategies...") I've been an investor in stocks for the past 14 years and have the confidence that I know what I'm doing. (Not that I ...
8
votes
1answer
1k views

How are proceeds from writing covered calls taxed?

When I sell call options based on an underlying security that I own (covered call writing), how are the proceeds treated fro tax purposes? As ordinary income? As a short-term capital gain? Is ...
3
votes
1answer
86 views

How do straddles that involve selling options protect against early assignment?

When doing a covered straddle in options trading, it involves selling put and call options when entering the straddle. But there is no way of guaranteeing that your options won't be assigned before ...
5
votes
2answers
269 views

Can a put option and call option be exercised for the same stock with different strike prices?

Refer to http://finance.yahoo.com/q/os?s=PEI&m=2011-10-21 If I were to sell a call @ 15 and sell a put @ 13, come October 21, is it possible for BOTH of the options sold to be exercised?
3
votes
4answers
6k views

Does the Black-Scholes Model apply to American Style options?

After reading the Wikipedia article on the Black-Scholes model, it looks to me like it only applies to European options based on this quote: The Black–Scholes model (pronounced /ˌblæk ˈʃoʊlz/1) is ...
4
votes
2answers
88 views

How can I find stocks with highly priced option premiums?

I'm trying to learn some basic arbitrage and I'm reading about tons of different strategies, but it looks as though option premiums are often less than $0.10.
2
votes
3answers
211 views

Can someone explain the Option Chain of AMD for me?

http://www.google.com/finance/option_chain?q=NYSE:AMD Specifically, the $10 strike. What does the $1.99 put mean?
5
votes
3answers
589 views

What do these options trading terms mean?

I'm trying to learn about options and when I log into my bank's online trading site I see the following selections in the menu. Can anyone explain what each of them mean and how they're different ...
11
votes
5answers
10k views

Please explain the relationship between dividend amount, stock price, and option value?

I consider myself a reasonably knowledgeable investor, but today was blown away by the fact that I didn't know that a stock's price is decreased by the amount of its dividend. To use a concrete ...
4
votes
2answers
234 views

Do investors go long option contracts when they cannot cover the exercise of the options?

Consider I want to buy some american-style call options for a particular stock, and suppose this underlying stock 'XYZ' is valued at $100 a share. Suppose I go long (buy) 10 option contracts for XYZ ...
3
votes
1answer
192 views

Funneling money from a Traditional IRA to a Roth IRA using Options: Is my method possible and tax legal?

I'm new IRAs and I have both a traditional and Roth. My plan is to buy stocks in the IRA and buy protective puts in the Roth that guaranty a maximum risk of 5% or less across both accounts. I expect ...
4
votes
3answers
415 views

Covered calls: How to handle this trade?

I bought XNPT (Xenoport) a couple of weeks ago at 6.93 I turned right around and sold the Apr 16 call. $8.00 strike and collected 1.50 in premium. Today I get a great surprise that XNPT has rocketed ...
0
votes
2answers
121 views

List of FLEX options?

PHLX advertise something called FLEX options: http://www.nasdaqtrader.com/Micro.aspx?id=phlxflexproductspecs How I read this: if someone w/ a lot of money wants to write their own options chain, ...
7
votes
2answers
404 views

What does this statement regarding put options mean?

I read an article in the NY Times, but I don't understand what this statement means: “The 16 puts on Cisco are offered at 71 cents. We should buy 1,000,” he says to a trader sitting across the ...
2
votes
2answers
121 views

Are weekly CAD/USD options untradeable?

As below, cmegroup.com seems to indicate that CADUSD weekly options (expiring 25 Mar 2011) have absolutely no volume or pricing. Does this mean they're impossible to trade? Or, if I had a broker, ...
3
votes
2answers
400 views

Interactive Brokers: IOPTS and list of structured products

As below, Interactive Brokers lets me trade "IOPTS". What are these? They also let me trade "Structured Products". I know what these are, and even know what an ISIN is ...
3
votes
3answers
139 views

What are your experiences with 'self directed' 401ks?

Some background: have no plans to leave current company anytime soon, so (short of borrowing against my 401k balance to invest outside the 401k) I can't get the funds out want to max out my 401k ...
12
votes
2answers
3k views

What are the tax implications of exercising options early?

Say you have the following situation: You have pre-IPO stock options Half of the options have vested, the other half will vest over the next 2 years Your strike price is S The fair market value of ...
0
votes
1answer
173 views

Can the bid price for selling the same call option in calendar spread be different from that in covered call?

I am trying to sell C (citi) call options expiring 2013 Jan at $5.00 in 2 different modes. Calendar spread mode: Bid Price is $0.24 Covered call mode: Bid Price is $1.01 1)Why is there a difference ...
11
votes
4answers
317 views

Covered Call Writing - What affects the price of the options?

A little while ago, I bought $800 worth of stocks and sold about $200 worth in call options against the stock. I think it was 200 shares and 2 contracts (so my options weren't naked). That takes the ...
8
votes
2answers
2k views

What are the odds of being assigned for a long dated in-the-money call option?

If I sell a 2-year future dated call option that is slightly in the money (For example if Citi today is $5.13, I sell a call option for strike price $5.00 at Jan 2013 - today is Jan 2011), what are ...
5
votes
2answers
661 views

When does selling (writing) options count for tax purposes?

Let's say I sell an option (say a naked put) that expires in January. If I wait until January to let it expire, does that mean the profits will count towards next year's taxes? Or since I actually ...
5
votes
5answers
8k views

Why are American-style options worth more than European-style options?

Why are American-style options worth more than European-style options? I realize I can exercise American-style options anytime before the expire, but I can only exercise European-style options ...
5
votes
1answer
995 views

Can the Delta be used to calculate the option premium given a certain target?

I’m struggling for a while now with a question about options, namely 'which is the best option to buy?'. I have various books on options, but I’m not an mathematician and don’t have (yet) any ...
6
votes
5answers
2k views

Where can I trade FX spot options, other than saxobank.com?

An FX spot option is a call/put on a FOREX currency pair that has a user-set strike price and expiration date. It's traded over-the-counter and is not a standardized exchange-traded option. If you ...
4
votes
2answers
912 views

Brokerage Fees for Covered Call Options

I have been doing some research and am thinking of selling a Covered Call on a stock I currently own and am planning on holding long term. I would like to make an Out-of-the-Money Covered Call (OTM ...
3
votes
1answer
408 views

Calculating fair value of an oanda.com box option

How do I calculate the theoretical "fair value" of an oanda.com box option? More specifically, how do I calculate the probability that a given FOREX parity will enter a given range in a given period ...
7
votes
3answers
591 views

Any advantage to exercising ISO's in company that is not yet public?

I have ISO's in a private company and am trying to decide whether there is any advantage in exercising them. The price is low enough and my confidence in the company is high enough that I am ...
14
votes
4answers
465 views

Options revisited: Gold fever

In my recent question, I asked how to operate with options. Now I would like to see whether I learned anything. At this moment, Gold is rising. Fast. As I see it, in the future, the gold price has to ...