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.
9
votes
3answers
194 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 ...
4
votes
4answers
102 views
How do I buy an option that doesn't exist yet?
For example, the latest option date on a particular stock is Jan 2014, but I want to buy an April 2014 option. According to Google Finance, none exists.
Is there any way I can place any order for ...
2
votes
2answers
176 views
Can heavy demand for options drive up or down a stock price?
I understand the market maker is the one quite frequently on the other side of my buy or sell option order (to make sure their is liquidity in the market, and offering the bid / ask spread as ...
4
votes
3answers
184 views
Margin when entered into a derivative contract
From Wikipedia
In finance, a margin is collateral that the holder of a financial
instrument has to deposit to cover some or all of the credit risk of
their counterparty (most often their ...
4
votes
2answers
40 views
How does the process of “assignment” work for in-the-money Options?
Consider the following scenario -
I have a covered call for XYZ for this month's expiration as XYZ May 18 25 Call. On May 18, XYZ is trading for $28, with the option listed above at $3.3.
If I ...
1
vote
3answers
86 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 ...
3
votes
2answers
136 views
Can you write a put option without sufficient funds to meet the potential obligation?
When writing a put option does your account have to be funded so that if the buyer exercises the right to sell you can meet your obligation, or can you write the put option without the funds to meet ...
2
votes
4answers
386 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 ...
6
votes
2answers
104 views
Why trade futures if you have options
At this link:http://www.investopedia.com/ask/answers/09/options-vs-futures.asp they explain the difference between futures and options.
It seems futures is an obligation while options is an 'right ...
1
vote
1answer
413 views
How to calculate the standard deviation of stock returns?
I'm trying to learn the the Black–Scholes option pricing formula and one of the elements of that formula (according to http://bradley.bradley.edu/~arr/bsm/pg04.html) is the "standard deviation of ...
0
votes
1answer
260 views
How to see an option chain's implied volatility skew
Are there any inexpensive tools, web-sites or services you know of where one can see:
a) current implied volatility skew for an option chain
b) historic implied volatility skew
Thanks
1
vote
2answers
88 views
How do you price an option?
Are there any good websites or does anyone know how to price a stock option. Is Black Scholes the only way to price an option or are there other ways as well?
1
vote
2answers
106 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, ...
11
votes
5answers
4k 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 ...
-1
votes
1answer
59 views
List of CFLEX 2.0 brokers
Apparently, one can trade CFLEX 2.0 with CBOE's trading platform: http://www.cboe.com/institutional/pdf/cflexqrg.pdf
However, I talked to CBOE, and they said I still have to go through a broker to ...
1
vote
2answers
57 views
Why do some symbols not have an Options chain for specific expiration dates?
In an attempt to generate income from holdings, I generally screen stocks that trade options regularly. In my research, I have noticed that certain stocks have weekly options - but not always. For ...
2
votes
2answers
177 views
When you buy an option contract, how often is the market maker providing the contract (vs. another investor)?
My limited/perhaps incorrect understanding is market makers keep liquidity in options by increasing spreads in options that are less in demand, because they have to provide/make a market for them. ...
1
vote
3answers
92 views
Specifically when do options expire?
Take these calls for example:
Call Time of expiration
SBUX Jan13 55 Call 2012-01-18 4PM EST
FIO Jan13 22 Call 2012-01-18 4PM EST
FB JanWk4 32 Call ...
1
vote
5answers
198 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. ...
3
votes
2answers
77 views
What risk of a diversified portfolio can be specifically offset by options?
I have been reading articles on portfolios and options. It seems options are used to hedge portfolios for multiple risk factors.
I would like to know why options, and why not futures?
What is the ...
25
votes
10answers
8k views
Options for dummies. Can you explain how puts & calls work, simply?
I never understood Puts or Calls. Could anybody explain it like I were a child?
2
votes
2answers
47 views
Execute or trade an options contract?
Take this call for example:
FIO Jan13 22 Call
Let's say this Thursday the stock goes to $23. Here is my math:
Cost of option: $35
Cost of stock bought at $22: 100x$22 = $2,200
Thursday price of ...
7
votes
5answers
803 views
Is there a good options strategy that has a fairly low risk?
Is there a good options strategy that has a fairly low risk? It doesn't matter if it's complicated, has several legs, and requires margin.
9
votes
2answers
109 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 ...
4
votes
1answer
148 views
How companies choose earnings release dates, & effect on Implied Volatility
A company's earnings release date significantly affects weekly or monthly option prices and implied volatility. For companies that typically release earnings on the cusp of monthly options expiration ...
1
vote
1answer
91 views
Knockout certificate (Long) fell more than 6% even though the underlaying security rose 1.2%
I recently bought a knockout certificate for facebook.
So far it has been doing great returning more then 200%.
But recently it has been doing something really strange. On Friday Facebook rose 1.2% ...
10
votes
2answers
678 views
How can put options be used to buy shares at a lower price?
How to use puts, if you are a net buyer of stocks?
I read an article about Warren Buffet buying Burlington Northern stocks and how he used puts to lower the buying price of the shares. Please, ...
4
votes
3answers
2k views
How do you calculate the rate of return (ROR) when buying and selling put options?
How do you calculate the rate of return (ROR) when buying and selling put options?
2
votes
2answers
1k views
Difference between Black-Scholes, Binomial models and Market price in European index options?
Need some help!
I have calculated the theoretical price of an index option using BS and Binomial models and are now comparing the three. While BS and Binomial have approximately the same value, ...
3
votes
2answers
126 views
Can the purchaser of a stock call option cancel the contract?
Let's assume there's a company, XYZ, trading at $11/share today. I purchase a call option @ $15 for $0.05.
Do I need to keep funds in my account to satisfy the contract? I know my counter party ...
1
vote
0answers
29 views
What rules govern when a new option series is issued?
As I'm typing this, the CBOE quotes and data page lists GOOG and FB options with expirations of September, October, November and December of 2012. But AMZN and GS only get September and October of ...
3
votes
3answers
203 views
Fraudulent Options, and Losing Money
In Batman The Dark Knight Rises, Bruce Wayne's account gets drained by fraudulent option buys that expire quickly. Is it possible for fraudulent options to be reversed?
1
vote
2answers
63 views
Can I convert spread option into regular call or put?
I have bought spread call on stock X. After that point, the stock went up and came back. My short position is the same price as it was when I bought it 1 month back. At this point If I just clear out ...
1
vote
2answers
101 views
Where to find really good articles on stocks and general trading information?
Apart from this website, are there any other websites out there that are focused on trading and investing?.
I am looking for a website where I can find articles etc on trading and investment - say ...
3
votes
1answer
545 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?
4
votes
4answers
168 views
If you want to trade an equity that reflects changes in VIX, what is a good proxy for it?
If you want to trade an equity that reflects changes in VIX, what is a good proxy for it?
4
votes
1answer
83 views
How can I track the value of options live in my portfolio
With stocks I can enter price and amount into most applications and they allow me track the total Profit / Loss live.
Are there any ways to do this with option positions?
I was considering entering ...
2
votes
2answers
103 views
What is a straddle?
I have heard the term straddle when referring to options many times. What would it mean if I wanted to enter into a straddle position?
6
votes
2answers
103 views
When I google a ticker like XLE or something, I see a price which updates frequently (about every second or so), where can I find this for options?
Is there an options ticker I can google to get this equivalent? Or any free place where I can see the quotes updating more regularly? I know the bats order book sh
5
votes
1answer
830 views
What does it mean to long convexity of options?
In this Bloomberg video, Curnett talks about volatility and the convexity of options. Specifically, he says;
"The spread between the VIX sitting there at 20 for a period of time and this realized ...
1
vote
1answer
245 views
Deriving the put-call parity
I am looking at the proof of the put-call parity, $P+S=C+Ee^{-rT}$
The proof begins by defining two portfolios with same strike price $E$ and time to expiry $T$:
1. A call $C(E,T)$ plus cash ...
1
vote
1answer
52 views
What is a long option?
I've heard of this term before but wasn't really sure of what it is, can someone provide me with some information and possibly a reference to that info?
0
votes
2answers
47 views
Why is a “long put” called long if you have a higher net position if the price decreases?
From Wikipedia:
to be long in a security, means the holder of the position owns the security and will profit if the price of the security goes up
The Payoff/Profit diagram shows that you earn ...
1
vote
1answer
324 views
Can you explain this options calls & puts quote table to me?
I was doing some research on options and I found the attached screen. I have no idea what it means. Can someone please explain the columns of the table and how to use such a table when looking up ...
1
vote
3answers
312 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.
6
votes
3answers
1k 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 ...
5
votes
1answer
199 views
What are Binary Options?
What are binary options, what can they be traded on and what is the process in trading them?
Also, are there any brokers in Australia who offer binary options?
2
votes
2answers
168 views
How can I estimate the value of private stock behind employee stock options?
I'm considering an offer with generous options. I have pretty high risk tolerance, so I'm just trying to estimate the expected value of the options.
To the extent possible, I want to base this on the ...
3
votes
1answer
310 views
If my put option reaches expiration on etrade and I don't log in to the site will it automatically exercise if it's in the money or be a total loss?
I ask because suppose you don't manually exercise and expiration day hits and it's in the money..do you lose it all or is the in the money gain automatically credited to your account?
3
votes
3answers
188 views
What is the best way to make a bet that a certain stock will go up in the medium term?
If I want to make a $1000 bet that, say, a share of AAPL will be $1000 in a year's time, what's the best way to do that?
AAPL is over $600 today, so with my $1000 I can only afford to buy one share. ...
