Questions tagged [call-options]

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

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20 views

Binomial option pricing model. Comparing prices

I want to ask a question that may be too obvious for some of you, but: I calculated the price of a call option (expires in 7 months) using binomial pricing model and it is significantly lower than was ...
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1answer
66 views

Options trading and arbitrage [closed]

Near market closing time on a given day, you lose access to stock prices, but some European call and put prices for a stock are available as follows: All six options have the same expiration date. ...
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51 views

How does an option's premium depend on its strike price?

(NB: In this question's title, and elsewhere throughout this post, I have used the word "options" as a stand-in for both "call options" and "put options", for the sake of ...
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1answer
50 views

What is the last possible time to exercise an equity option traded on CBOE?

I own 100 shares of AAPL an I am short the Oct 9 2020 $117.50 call. As per this CBOE link, the long holder may exercise that contract at any time before the contract expires, up to and including the ...
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1answer
45 views

Would a call option with one strike price be worth more than a call option with two different strike prices?

For example, say there is a call option with a strike price of $50 for a stock. Now, say there is another call option for the same stock with a strike price of $50 if the stock price is below $60, but ...
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2answers
99 views

Lifecycle Investing through index options

I'm a young DIY investor who is looking for ways to consistently implement the approach outlined in the Lifecycle Investing book by Barry Nalebuff and Ian Ayres. In short, they suggest using moderate ...
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1answer
106 views

How not to pay taxes on covered call

I bought 100 shares of ESPO four months ago for $50 and sold a September 18 $62 covered call at Robinhood. With the stock trading at $61.50, I think that it's likely that I will be assigned. I will ...
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1answer
47 views

Lot size for NASDAQ Equity options

I'm going to trade in NASDAQ equity options, please share link where I can find lot size of each equity option contract?
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1answer
3k views

How is it possible that these deep ITM stock options on DISH went from 52,000 volume, 550 open bids, 550 open asks to being completely dead overnight?

I bought 16 years of historical hourly stock options data for my personal investment study to test how particular strategies may have played out over a long period of time. I'm looking at the data for ...
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1answer
112 views

Stock Option expiring before the announced acquisition, help!

I recently bought 17 Livongo $150 call options that expire on Aug 14th. LVGO closed yesterday at $144.53. This morning they announced phenomenal earnings and shares reached a high of $167.88 in the ...
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1answer
41 views

Prices increases leading to call debit spread loss

I recently entered a debit call spread on Apple and I noticed the price of the sold option appreciated at a faster rate than the bought option resulting in a loss even though the stock moved in my ...
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2answers
80 views

Does increasing value of a still-out-of-the-money option that you wrote (covered) pose a risk to you?

I am a US citizen living in the US. I want to write covered call options to receive premiums. If implied volatility increases and/or the price of the underlying rises, an out-of-the-money call can ...
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1answer
57 views

Can day/week traders take profit from Volatility only?

Assume a stock varies between the prices $40 and $45 every three days, and the current price is $42. The trader buys 1 CALL Option contract for a strike price of $60 that expires in a month. Can this ...
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3answers
70 views

How the traders take profit from options that has too far Out Of The Money strike price?

Looking at the Amazon Options on this Yahoo page, there are 121 options interest for June 17, 2022 for the strike price of $5000. Assume that some traders bought the options when the stock price was ...
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1answer
89 views

Confusing loss on closing options spread

Today I closed a spread on $TSLA, specifically a 3x bull call expiring Aug 7th, 2020. The spread was composed of 2 legs as : Buy 1330 call Sell 1360 call My P&L on the trade before closing looked ...
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1answer
86 views

Unable to transact with OXY LEAP

I had bought long-dated Calls on OXY. Something happened around a month ago where the ticker I started seeing in my IB app turned to OXY2. Today I wanted to sell it and it seems the contract is no ...
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1answer
46 views

Help understanding Collar strategy

Could someone explain the drawbacks of this option collar strategy on PPL? It looks to me that there is minimum risk. I use Robinhood for my trades and pay no commissions/fees. Buy 100 shares for $...
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1answer
85 views

What to do with a call I sold

I own 300 shares of NCLH, I sold a call last Monday with strike price of $16 when the stock was at $15.8 for a premium of $115 (for the 3 calls). The Call expires tomorrow and I don't know what I have ...
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1answer
27 views

Order Type to sell options a few days before the Expiration

With the stock at $175, a novice trader buys 1 call option: Option Price: $20 Strike Price: $200 Expiry: December 15, 2020 Cost: $4,000 He wants to SELL TO CLOSE the option on December 1st, 2020 ...
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2answers
80 views

What will happen if CALL OPTION expire IN-THE-MONEY without sufficient funds?

Suppose a novice trader opens an online account with $5,000 with online trading platforms like e*trade, Ameritrade or Robinhood. With the stock at $175, the trader buys 2 call options: Option Price: $...
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2answers
42 views

Does option “automatic exercise” take commission into consideration?

Automatic exercise is a procedure implemented to protect an option holder where the Option Clearing Corporation (OCC) will automatically exercise an "in the money" option for the holder, ...
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1answer
77 views

How long does it take to exercise an option?

If I have a call option and exercise it today will I be able to receive the shares immediately to sell them?
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2answers
69 views

Adjusted Options (Long Calls) on Expiry

I bought Long Calls (options) almost a year back. This trade was made in 2019: CHK210115C3.5 Strike price $3.5 Underlying symbol:CHK Expiry: Jan 15 '21 After CHK underwent a 1:200 reverse split two ...
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1answer
68 views

Can you borrow shares from broker to cover naked call?

If I sold a naked call, and the buyer exercises it. Can I borrow the shares from the broker to fulfil it?
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1answer
46 views

Basic Options Understanding

Two general questions: 1) If "A" creates a put option, "B" buys it, then resells it to "C". If "C" exercises the option, who gets assigned: "A" or "B"? 2) If I buy a call option, it has the same ...
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4answers
7k views

Who buys these significantly out-of-money options? [duplicate]

The following is the screenshot of the NIFTY 50 option chain. It is taken from the following link. Why are these people buying these significantly out-of-the-money options? In this case, it's the ...
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1answer
75 views

USO Dec'22 Options cost 20 times less than options in 30 days or so

I am confused. I have long term USO (600+ days) options and currently they are trading 20 times lower than the same options that expiring 20 days from now. Should't the long term one have time value + ...
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2answers
72 views

Is there intuition behind asymmetry in call and put prices?

There is a certain asymmetry in (European) call/put prices, even with negligible interest and dividend rates. For example, assume current price $100, interest rate 0.01%, dividend 0, volatility 25%, ...
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2answers
61 views

In Options call does the strike price matter if the intent is to buy the stock?

Lets say, I want to buy a call option whose underlying stock has long term potential but there are some near term risks. I want to wait and see how the stock performs for a few months and buy if it is ...
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0answers
41 views

Can companies raise cash by selling covered call options on their treasury stock?

Suppose a company has lots of treasury shares. Can it raise cash by selling call options covered by the treasury stock? If the stock price ends below the strike price of the calls sold, then the ...
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2answers
62 views

Writing ITM Call Option For Extra Profit

Say I buy 100 shares of XYZ at $20 a piece, and it rises in price to $25 a share. Is there any downside to writing/selling an ITM call option at a strike price of $25/share as far as I can in the ...
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4answers
41 views

Call Option: Is in-the-money term same for Seller vs Buyer?

I am confused about the term in-the-money when I am acting as Seller. For a CALL option: When the current market price of stock is greater than strike price, it's a considered as In-The-Money for a ...
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0answers
60 views

What happens to my Long Put (Bought Puts) when company file chapter 11

What happens to my long put that i buy for Dec 2020 if the company files for chapter 11 in Nov 2020 or before option expiration. Would I be able to sell those long puts to get maximum reward for ...
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2answers
129 views

Who is on the buy-side of a sell-to-close call options trade?

While I think I understand the mechanics of opening a call position, I am confused about the mechanics of closing a call option prior to expiry. I am party A. Buy-to-open: Party A (buy-side) is ...
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2answers
53 views

Why's an “Adjusted Option 10 Shares per contract” offered for just Jan 15 2021?

A contract covers 100 shares of the underlying stock, but this is my first time chancing on an Adjusted Option. We clicked "Click here for help", but Questrade's link is broken and no useful ...
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1answer
27 views

Can options exercised after market closes on Friday pull dividends

Assume a stock has an ex-dividend date that falls on a Monday. A covered call is sold Friday just before close. If the call is in the money would the option owner be able to exercise the call in ...
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2answers
67 views

New to Options trading

I'm fairly new to trading options. I have been trading stocks just as a side source of income and I've been exploring trading options. Would you guys be able to recommend any strategies I could begin ...
0
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1answer
68 views

Can a broker make it appear they have executed a 'buy to close' trade but in actual fact they simply have taken your position?

If you wrote a call option, and the underlying spiked up creating a margin call - which was not filled, can your broker make it appear that they executed a 'buy to cover' to close your position but in ...
3
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3answers
150 views

Options Trading: How to lock in unrealized gains?

I've been learning about options trading, but the one thing I haven't explicitly read anywhere is how you actually lock in (i.e. cash out/collect earnings) from options trading. Take the following ...
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2answers
38 views

Buying stocks for CALL OPTIONS that losing value

This is the scenario. Trader bought a CALL OPTION contract with a strike price of $15 of a stock XYZ that expires in a month. But the price went down to $12 in a week. The Trader sees this stock can ...
11
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4answers
8k views

Why do people exercise call options at a loss?

I sold some call options for $2.55 premium at strike price of $130. At expiration, the market price was $130.55. I thought the option was not deep in the money and at a loss of $2, hence I didn't ...
0
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1answer
106 views

Calculations Check on $SPY Strangle

I'm researching options strategies and I started paper trading a $SPY options. Here's my strategy: Set up a strangle 5% above and below the market price expiring a month from the day of trade. 12 ...
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2answers
149 views

Is it necessary to have 100 x strike price in cash or margin before entering a naked call credit spread?

Context I have no background in Finance but I have many years experience in investing in equities for my personal portfolio so I have a basic understanding I have never traded options I'm keen to ...
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1answer
67 views

Is it better to buy the stock over a long call if volatility is high?

I've been looking at buying long calls of $ZM, but when calculating my P/L i'm thinking it's basically a wash to buy the option and might as well just buy the stock. Wondering if this is true or if ...
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3answers
437 views

Selling covered calls does not make sense

I have one bitcoin and was thinking about selling call while owning the asset. However after some pondering I came to the conclusion that if price drops then the strategy can only be performed one ...
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1answer
141 views

If you're bullish, buy stock or call options?

Presuppose that you believe a stock to rise in price. What are the pros and cons of buying a stock vs call option? Aristofanis Papadatos disadvises buying calls: When investors purchase call options ...
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2answers
2k views

Buying call options without enough money to exercise [duplicate]

I'm starting to dabble with options and I bought the March 20 AAPL 330 call option for $5. AAPL is currently trading around $324 today. If I sell the call option today I will make a small profit on my ...
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1answer
66 views

Selling a call option

There has been a lot of discussion about selling a call option. I read a good number of explanations but I didn't get clarity on this. Let's say a stock is trading at $80 per share and I sell a Feb ...
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1answer
89 views

How do you go from a belief a stock will be a certain value to choosing a call option?

I'm familiar with stock trading and watching for market news and basic things like that. I have money I'm willing to lose to learn options trading. I have some stocks with earnings reports coming up, ...
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1answer
87 views

Sell the long on a debit spread to move it closer to the short?

I’ve been thinking about opening a wide bullish debit spread on SPY with a two month time to expiry. I’m currently looking at the March 20th calls and am thinking of selling the $425 call while ...

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