Questions tagged [call-options]

A call option is a contract giving the owner the right, but not the obligation, to buy a specified amount of an underlying security at a pre-determined price within a specified time frame. Related tags are icall-options, options, options-assignment, option-exercise and should be used when appropriate.

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Exotic options with lookback features

I am trying to value an american call option with a lookback feature. So the holder can choose to exercise either based on a fixed strike (K) or a strike equal to 10-day moving average (MA). I tried ...
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Option trading strategies for buyers which really works [closed]

Is there any option buying strategies which work almost every time?
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Tracking moving average in a binomial tree model [closed]

I am trying to build a tree model and to tracking the moving average (say 10 day) of each branch. Is there an easy way to do it? I just built a tree and really have no clue how to proceed from here. ...
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Why is simply buying an in-money-call and a lower strike price put near an event date a good low-risk high-reward strategy?

My premise is that buying both an in-money-call and an lower strike price put near an event date, is perhaps, one of the better low-risk high-reward strategy. Why? If the stock moves significantly ...
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'Inversion' of option chain: calls are more expensive than puts above the strike price! GME

Over the past two days there has been a weird phenomena on GameStop's options where the call options are more expensive than the put options above the strike price. I would have imagined that some ...
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Understanding the Call and Put options premium change wrt base index for morning 5 minutes

I was watching the graphs for call and put Nifty options for the first 5 mins for the date 29 Aug, 2022. What I noticed is that even though the Nifty 50 index chart for the first 5 mins was doji ...
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How to estimate or determine leverage from strike price on ITM call option?

In this text 4x leverage is mentioned: "ITM call options have a strike (X) below spot price (S). ITM call option position is determined by aiming for ~4x leverage. The position size is set at 33%...
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What's the negative about buying contracts 1 month out when scalping options? (Is it buying same day or 2-3 day contracts are way cheaper?)

What's the negative about buying contracts 1 month out when scalping options? (Is it buying same day or 2-3 day contracts are way cheaper?) I don't want Theta to negatively affect my gains.
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Why IV are moving opposite to each other?

Please refer to the figure below, the graph is of European-style options of call side IV and put side IV at the same strike and same expiry. The graph is not of some stock but of an index. Also, this ...
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What effects does a change in IV on the call side have on the put side?

In a European type options market, consider this scenario, where someone starts to buy call options very aggressively which increases call IV rapidly. At the same time, the underlying price remains ...
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Can I take profit in option trading if

If the current price of a stock is at 2000 and I take a call option buy at strike price 2100 weekly expiry with 80 ltp. Suppose now ltp increases by 5 points and yet the price does not go above 2100, ...
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How to value cash as a call option?

Recently came across this article regarding Warren Buffett's biographer from 2012: “This is one of the most important things I learned from him: the optionality of cash. He thinks of cash as a call ...
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Do I need to worry about dividends when trading credit spreads?

I trade in the options market, mostly with vertical credit spreads. If one of my underlyings has a dividend coming up, does that affect my holdings? My guess is that the short and long position would ...
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As an EEA retail investor, how can I purchase options on Gold / Gold ETF

As part of my strategy to hedge against rampaging inflation (and assuming that Gold really is a good hedge against inflation, as it has generally been over the years), I'd like to purchase medium-term ...
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Is there any difference between placing a "buy & sell call option" & "buy & sell put option"?

I have attached two Options order charts. Max profit & loss are the same. But one (put) costs less than the other (call). Is there any real difference between these two orders? Is there any real ...
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What is the Arbitrage opportunity with American options and European options here?

Suppose that the current stock price is $100, the exercise price is $100, the annually compounded interest rate is 5 percent, the stock pays a $1 dividend in the next instant, and the quoted call ...
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Long ratio put spread versus call strategy for stock of ABC company

Part(1) Long ratio put spread versus call strategy for ABC company Current market price:$639, view: moderately bearish Buy 2 February 630 Puts@ 35.00 Sell 1 February 660 Put@ 52.00 Sell 2 February 690 ...
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What is the downside for covered call options?

What is the downside of selling covered calls on the stocks or ETFs you own that have appreciated significantly from their original purchase price?
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Does, buying a put involve someone to sell a call?

Does, buying a put involve someone to sell a call ?. When a trade to buy put is made from one side does it means someone is selling a call from other side. ?
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What happens to the 100 shares if someone "sell to close" their call option position?

Allow me to explain. Let's say I sell 1 covered call and receive the premium. When I sell a call, I am assuming that someone on the other end would have bought my call (say Nora). If the share price ...
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option best ask doesn't move unless I place an order lower than the best ask

as in the picture.Before I placed an order.The best ask was 0.35 and did not move at all.This option's volume was very low. And then I placed a 0.30 sell order, size was 73. Suddenly the best ask size ...
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When are premiums received for selling covered calls/naked puts realized?

For example, if I were to buy 100 shares in APPL today and sell a covered call option with an expiration year of 2022, would the premium that I receive be realized upon sale or when the option expires ...
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Calculating put-call ratio when volume is @0

So i have to do a put-call ratio plot. However i have to decide between using open interest and volume to calculate PCR. But in our data, the volume for some put/call options are 0. Is there a way to ...
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Near expiration call options

Suppose I buy a call option for a stock (current price is $5) for $500 and a $0.5 strike price that expires in a year. The year is almost up (say its the last day 3 hours before expiration), the stock ...
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How does expiration/assignment work in synthetic covered call

What happens if I let a short call expire worthless on a synthetic long stock I've purchased. Here's my scenario. Bought a CALL @ 870 and sold a PUT @ 870 both expiring in 177 days. Also sold a CALL @ ...
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How much LEAPS can lose with deep in-the-money strike price?

This is the scenario. The current price of a stock is $100. I buy a CALL $50 strike that expires in 2 years contract for $10,000. An year later the price of the stock drops to $80 and float around ...
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Covered call buy-to-close using sale of underlying?

If I write a covered call, my account will be long the underlying and short a call. Say I withdraw the premium from my brokerage account and spend it, invest it elsewhere, etc. If I want to later sell ...
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Why ATM Call Options have larger negative theta compare to OTM and ITM?

Why do ATM Call Options have larger negative theta? For the same ATM Call Options, why smaller expiration, the more negative the theta? Can someone provide intuitions or explanations?
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How to manage covered call position when stock price goes down

So let's say you have a position like this bought 100 shares of XYZ at $50 sold 1 covered call at $55 strike, received a premium of $2 stock price goes down to $35 now premiums for strike prices ...
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Selling Covered Calls p/l

I recently entered the options trading market to start generating a passive income on stocks I intend to keep for the foreseeable future. I entered a position on a pharma play with 100 stocks @ $2.70 ...
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Short options trade ITM assignment criteria

Can someone please explain something about the option spreads? How come this broker is not exercising these short options in this video as they are deep in the money? https://www.youtube.com/watch?v=...
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Writing call options, when do I receive premium?

I own 100 shares of a stock and I would like to get into writing covered calls. I'm just curious: If I write a contract, do I immediately receive payment for it from my broker? Or do I have to wait ...
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May I get more than the strike price difference when roll up an ITM call option?

I have an in-the-money call option that expires shortly and I see further upward potential of the underlying stock, so I decide to roll over to a longer expiration date. Now, if I choose to roll up to ...
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(Stock)/Option Positions

I'm studying for my SIE, and I have a question along the lines of Difference between naked put, covered put, protective put. Can someone help me fill in my "??"'s? "Long (stock)/Long ...
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What will be the impact of time decay on Options Premium?

Let's say you have bought a July Nifty CE or PE in June at Rs. 250 premium. Can you explain how its premium will change over time if nifty increases/decreases towards your strike price? Basically I ...
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How does strike price and assignments work

At the beginning of the week, a stock is $45. A one week $50 call is purchased. On Wednesday the stock fluctuates between $44 and $55, closing at $49. What price info is used to calculate if an ...
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Owning OTM Calls on a company that was acquired

I own 10 $stay calls exp 7/18 but they were purchased this week and the ticker no longer exists. Am I screwed? I can't find anything online.
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Option chain with nil bid quantity and price

Let's assume I bought a call option ABC CE @.50 and now its value is @.10. There is no bid price or bid quantity. Am I able to sell the option at @.10 anyway?
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If I short an option and the buyer exercises the contract, what will happen?

Let's say that I'm on TDAmeritrade. I short a call option to collect a premium. I also own 100 shares of the same stock in the same account. In a week, the option is in-the-money and the buyer ...
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Should I sell to open or sell to close

If I have inherited stocks through employer provided stocks (RSU). I haven't ever placed a "Buy to open" trade. If I want to sell a CALL option and place a trade (say current stock price is $...
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Who are the non-speculative buyers of futures options?

I am trying to understand who would be a non-speculative buyer of options contracts on futures. There are a plenty of descriptions of how options work online, but mostly they omit this crucial part of ...
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Taxes when exercising an option (not ISO)

Nearly all of the information that I can find online on option exercise and taxes are related to employee stock options, where you do get taxed on the gain (even if on paper) between the strike price ...
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Strange call options price in Germany?

Disclaimer: I'm a beginner in the options world, didn't do any trades yet, just researching. Today I looked at call options prices for BMW. On HSBC site I found this call option with expiration date ...
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How to buy 100 shares when exercising call option

I recently got into options, and I'm a bit confused on how to exercise my contracts. I have an in the money contract. I understant that if I sell to close, I sell the contract at its current price, ...
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Covered call help

I sold a covered call and received the premium right away. Question is the call now is the money and my total return shows negative. If when this call gets called away or close by expiration date does ...
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Buying an Option with a premium lower than the Bid Price

For a share trading at $272, I placed an order to buy an option with Strike Price at $275. The Ask is $10 and The Bid is $9. I entered at $9.10 with expiration in Sep. The order has not been filled ...
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Can option writers "buy to close" if holders refuse to sell?

I am new to option trading. How do we know an option is ITM on the expiration date when the underlying asset price could fluctuate throughout the day? If we short a call/put, understand that we &...
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What is the delivery time of the underlying stock on an option and what is the process?

I am new to option trading. I would like to know: For US options, what is the time frame for the underlying stock to be delivered once the call/put is exercised? If sell a call and I am unable to ...
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Call Option pricing when OTM

In this example, XLX of the binomial option pricing I am pricing American call options using the binomial method. I was wondering if in the first period (0.1), the price of the stock after a downside ...
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Price of a Call Option as you Increase the time periods

I'm pricing call options at the moment and seeing how call option prices change depending solely on the periods of volatility. In one case the stock changes every month, the other it changes every ...

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