This tag is to be used for any question on put-options. i.e. a agreement or right to sell a stock or commodity at a specific price. Related tags [call-options, options, options-assignment, option-exercise] should be used when appropriate.

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1answer
43 views

Can I buy put options on an ADR?

A stock is listed on Tokyo Stock Exchange. I want to buy put options on it - how can I do that? Or is short selling an ADR my only possibility?
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2answers
50 views

Put on a put option

I am not entirely sure why you would want to do this, but if you believed that a stock would increase in value, but you doubted yourself severely, would it be possible to buy a put option where the ...
0
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1answer
305 views

Always profitable combination of options strategies?

Why can't we just combine multiple options strategies to get an always profitable scenario? For example by combining protective call and protective put won't we be able to get an always profitable ...
2
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2answers
71 views

When a near term outlook on an asset is negative, is it possible to make money using both put and call options?

This question is about Put options. These contracts give the buyer the right to sell some underlying asset at some agreed strike price at or before (American style contract) the expiration date. ...
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3answers
42 views

Selling put and call Loss Scenario Examples

I am building selling portfolio for option trading. I can find buying call and put scenario but no scenario for selling and losing side. For e.g. If buyer exercised put option, what happened on ...
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2answers
83 views

Buying puts without owning underlying

I'm looking to buy puts for short-term option trading. My time horizon is a week to two weeks at most. I only ever trade the options - I never hold to expiration. When I attempt to buy a put, I get an ...
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0answers
22 views

Which option is more expensive?

Consider two European put options, written on the same asset, with the same maturity, but different strike prices: K1< K2 Which option is more expensive? Then Answer the same question, but using ...
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0answers
16 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?
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3answers
99 views

How to record “short premium” in double-entry accounting? [closed]

I write (sell to open) puts on margin for “short premium” on my personal account. The contract note for an opening transaction lists a number of components: • contract number • option symbol • strike ...
3
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1answer
67 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 ...
0
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2answers
79 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 ...
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0answers
18 views

Conflicting options chains

Can anyone explain to me how Yahoo finance can show completely different option chain data than CBOE on occasion. Today, the option chain date for a EEM Jun 16 $40 put shows a different prev close ...
3
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4answers
671 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?
2
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1answer
94 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?
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0answers
108 views

Question about margin and investing

Lets say I have $10,000 cash in an account and margin buying power of $20,000. I sell a put that is worth $9,000 and it gets exercised. Will I be using margin since i have enough cash in the account ...
0
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1answer
115 views

How does a dividend announcement affect a option straddle position

If I buy an at the money straddle, hoping to profit from a volatility increase, then how does an underlying dividend announcement affect my PnL? I am thinking that if the underlying announces a ...
2
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2answers
348 views

When does it make sense to early exercise a deep in the money put option

I understand the logic for call options. When dividends exceed the time value left, then it is profitable to early exercise a call. But the same does not hold for a put. So, when to early exercise a ...
0
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2answers
300 views

What strike to choose if I want to sell weekly calls against a long LEAP put

I am looking at this strategy of selling weekly calls against long LEAP put options The strategy seems good to me. Quite an improvement over the regular collar strategy. What I do not get is why ...
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2answers
101 views

How to hedge a long stock position that does not have options

I am sometimes tempted by the juicy dividends of some Canadian stocks because dividends are taxed favorably by CRA. One such company is RSI Problem is, I would like to protect the long position from ...
2
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1answer
501 views

Can I exercise my put if a company goes bankrupt?

If I purchase a stock and a protective put, and the company goes bankrupt, can I still sell my stock at the strike price of the put?
0
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3answers
463 views

Dividend arbitrage using in the money puts

I was looking at dividend arbitrage It seems all I need to do is find stocks with a nice dividend(e.g KO). Then find an in the money put where the time premium is less than the dividend to be paid. ...
0
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1answer
70 views

Understanding Put Options

I would like to verify that I have a correct understanding of hedging using a put option contract. For stock XYZ, the current price is $12.50. When I look at the options trading table, it appears ...
0
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1answer
108 views

Understanding the synthetic long put option

I am having trouble understanding the following synthetic relationship: Synthetic long put option = Short underlying + long call Now, if XYZ is at 40, and I short XYZ at 40 and also purchase the ...
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3answers
1k views

If the put is more expensive than the call, what does it mean

If an At the money Put trades for much higher than the ATM call, can we say that people are expecting the stock to move down? After all, what else could be the reason if the put is more expensive ...
1
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1answer
159 views

Is a naked put really that risky

The word 'naked' in relation to options is synonymous with unlimited risk. But 'naked' puts are limited risk, the risk is limited to the strike price. So , why is it classified in the same category by ...
4
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1answer
2k 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 ...
0
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3answers
183 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 "...
0
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0answers
143 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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1answer
60 views

Covered call vs naked put in online brokerages

If a covered call has same risk profile as naked put, how come brokers allow covered call but only allow naked puts to experienced traders?
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1answer
46 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
89 views

Exercise a put option when shorting is not possible

Sometimes when I want to short a stock, my broker says that no shares are available for borrowing. In this situation, can I buy a put and exercise it immediately and end up with a short position? in ...
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2answers
83 views

Value of put if underlying stays below strike?

If ABC stock is trading at $5 and I buy the Jan 15 strike put for $8.25, what happens to the value of this put at expiration if ABC only meandered between $5 to $7 during the entire period?
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0answers
51 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 ...
7
votes
3answers
2k views

Am I understanding buying options on stock correctly

I'm just wondering if I am understanding Stock options correctly. Basically if I am watching stock XYZ. It's currently at $10 per share which I believe is low and should raise to 20 within 1 month. ...
2
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1answer
83 views

Why don't options chain prices vary smoothly?

I'm looking at options chains for SPY for some particular expiry date. I'd expect that the last trade prices would vary smoothly with the strike price. But they don't; there are occasional puts that ...
2
votes
3answers
256 views

Why does a long/purchased call option have a long position in the option itself?

I am teaching myself some finance through a book. And I get confused by call/put options having short/long position in the options themselves or the underlying assets. For example, I understand the ...
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5answers
2k views

How do you go about exercising a put option with less than 100 shares?

I've 50 shares of a company and I'm wanting to leverage that with a put option (Buy to Open, with the expectation share price might drop). When the prices is right and I want to exercise the option(...
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2answers
145 views

Do I have to pay MLP distribution if short via option?

If I sell a naked put on VLP, do I have to pay the partnership distribution if I'm holding the option when the distribution is declared?
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1answer
105 views

A basic put option example

If I buy 100 shares of XYZ at 18$ and a put option with one month to go at a strike of 19$ for 45 cents, then my total expense is 1845$ . Now do I have a guaranteed profit of 1900 - 1845 = 55 $ in a ...
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1answer
2k views

Difference between naked put, covered put, protective put

If I buy a long put without holding the underlying, does it amount to a naked put? If I hold the underlying and buy a put, is that a covered put? Also if I hold the underlying and sell a put, is that ...
7
votes
3answers
3k views

How does one typically exit (close out) a large, in-the-money long put option position?

I'm long some puts on a stock that has dropped a great deal. I've made $400,000 on an investment of $100,000. The question is, how do I exit? I can't really sell the puts because there isn't enough ...
5
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1answer
1k views

Options: Letting it expire or sell when profiting?

Do you let your options expire or would you sell it before you let it expire if you're profiting (meaning you're in the green - market is going towards the correct direction you anticipated). If you ...
0
votes
1answer
147 views

Put-Call parity - what is the difference between the two representations?

I have seen these two terms for put-call parity: S + P = C +Ke^(-rT) S + P = C + K/(1+r)^T Which one is the correct formula? When to use each of them? What is the diffrence?
3
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1answer
135 views

What is a bull put spread?

When someone in the stock market says they are going to do a bull put spread, what does that mean, and what services do they use to do it?
3
votes
2answers
246 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 ...
4
votes
3answers
519 views

Options strategy - When stocks go opposite of your purchase?

I'm a bit new to options and would like to ask for someone's strategy opinion. Lets say that you buy a call at an expiration date 2 months or so from now, and in a few days you see the stock go flat ...
2
votes
2answers
6k 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, ...
2
votes
1answer
103 views

Can you help identify/name this equity options strategy?

I am thinking of making such a trade: BUY PUT $590 MARCH WRITE PUT $600 APRIL I have done some reading and it looks like a diagonal put spread, but the diagonal put spread uses an out-of-the-...
2
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3answers
8k views

Difference between European and American options

Appreciate some help with a problem i am facing OK, so first I found a put and call option with same strike price and maturity for both American-style and European-style options. I selected the ones ...
2
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3answers
1k 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 ...